The rationale of this paper is to look into the determinants of credit risk on account of Islamic banking industry of Pakistan. Researchers have taken 13 Islamic banks information from the year 2005-2017, this paper makes utilization of the fixed effect regression model to give observational confirmations on credit risk behavior with respect to Islamic banking industry in Pakistan. The findings show that capital ratio and financing quality reveal steady outcomes regardless of specification and estimation models. The finding added critical verification to the present writing on layaway hazard specifically Islamic banks credit Risk. Management of Islamic Banks in Pakistan should consider that BSV do significantly effect on credit risk for management in Islamic Banks. They should keep in mind that any worsening in financing will be result in higher loss provisions.