Posted by: islamicfinancingnews | September 3, 2012

Fixing bad credit can help you qualify for Islamic mortgages

When you are looking for a reputable lender that offers Sharia compliant Islamic mortgages to finance your home purchase, it’s important to understand there are requirements at your end such as having a decent credit rating. However, if your current credit rating has suffered, there are some ways you can help rebuild your score and keep it on track.

Paying bills on time should be a number one priority. While companies such as utility services do not generally report your payment information to a credit bureau, other companies such as cell phone providers may hand over late payment accounts to a collection agency which could lead to a drop on your credit score. Therefore, it’s a good idea to get in the habit of paying all bills on time. Secondly, keep credit applications to a minimum. Every application you complete invites lenders to inquire about your credit rating and this could negatively affect your score. Lastly, be aware of your credit card balances. Keep in mind, the more you owe, the more your credit score is impacted. It’s wise to use credit cards responsibly and try to keep as far below the credit limit as possible.

Making sure you are financially ready when you find a home that’s right for your family includes building and maintaining a good credit rating that allows you to qualify for Islamic loans free of Riba.

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