Here’s How Your Credit Score Works With Islamic Financing

Islamic financing is different from the traditional model in some ways. However, there are some of the same requirements like a good credit score. This is just one of the things a lender considers when they are looking at whether you are an excellent candidate for a mortgage.

This score is a measure of an individual’s financial health. Even for people looking at riba free financing, it’s an indication of the level of risk a lender is taking.

Your credit score is a number ranging between 300 and 900. If you have one of 700 or above, it’s proof that you can manage credit well. That means that lenders should be comfortable letting you borrow money.

We like to tell our clients that during the Ijara process, there’s no need to be too concerned about the effects of their credit history. Still, it’s a good idea to get a copy of your credit report before you apply for Islamic financing.

Each of the credit reporting agencies uses different criteria to put together your credit score and calculate the numbers. However, each of these scores is  based on certain factors including:

  • Your credit history that includes how long you had your accounts opened for. The general rule of thumb is, the longer the better.
  • The number of new credit requests that you make can also affect your overall score. However, checking your credit numbers  does not affect this number.
  • The different types of credit that you have are another factor. A mix is best here. Having a line of credit, an auto loan, and a credit card will help.
  • How much debt you use as opposed to how much credit you have also matters. For example, experts recommend that you use under 35% of what’s available.

Take a few minutes to look through the application process requirements on our website. You’ll see a variety of different categories about our Islamic financing method.  The credit report is one along with some other useful information including appraisal basics and underwriting and closing costs.

Back to your credit score. Here are a few things that you can do to keep that number under control.

  • Using your credit wisely helps to keep your score balanced. For example, experts suggest that you only use 35% of what’s available.
  • Having a mix of various types of credit is helpful too. That includes things like a credit card, a car loan, and a line of credit payment.

Remember, you should always be open to the possibility of using new types of credit that are Sharia-compliant. Take a few minutes to look at a brand new item—the Ijara Token. It’s like having a HELOC in the crypto marketplace.   

Here’s a final tip about your credit score. It’s always a good idea to check to see if there are any errors or omissions that can affect your overall standing. People in the United States looking to access their credit score can go to

Ijara Community Development Corp