Is a Credit Repair Business Permissible?
Question:
Is a business that helps individuals with improving and repair their credit score permissible? (a score that verifies commitment to pay bills, rent, and mortgage on time) Some might use this to apply for interest loans. is this permissible to open?
Answer:
In the Name of Allāh, the Most Gracious, the Most Merciful.
As-salāmu ʿalaykum wa-raḥmatullāhi wa-barakātuh.
In principle, a business is permissible if the products and services offered are themselves permissible.
In North America, a bad credit score can result in great difficulties. It may negatively impact the ability to find housing and access to other important services.[1] Credit repair companies typically contact credit reporting bureaus on behalf of the customer and will remove inaccurate information from the reports. Sometimes, advice will be given to the customer to help them get out of debt.[2] If this is the scope of the work, it is permissible. If there are additional things that this business would entail, please inform us, and we can inform you of the ruling for those services.
The fact that a person may use their improved credit score to apply for an interest-based loan does not affect the permissibility of the business’s income in any way.[3] Rather, it is the deliberate act of the customer, and therefore, the sin will be attributed to them and not the credit repair business.
And Allāh Taʿālā Knows Best
Muftī Mohammed Wahaajuddin
Farmington Hills, Michigan, USA
Checked and Approved by:
Muftī Faisal bin Abdul Hamīd al-Mahmūdī
Darul Iftaa Canada (www.fatwa.ca)
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[1] https://www.investopedia.com/the-side-effects-of-bad-credit-4769783#:~:text=A%20poor%20credit%20history%20can,you%20in%20a%20job%20hunt.
[2] https://www.rocketmortgage.com/learn/credit-repair-companies#:~:text=A%20credit%20repair%20company%20is,improve%20your%20credit%20over%20time.
[3] https://fatwa.ca/assistance-in-sin-uber-eats-vs-waiter/
