Question: We know that the kafîrs [disbelievers] cannot earn any thawâb no matter how many good deeds they may do. But if a disbeliever who has good deeds becomes a Muslim, do his or her former good deeds become valid, too? Secondly, if an atheist becomes a Muslim, is his or her repentance accepted?
ANSWER
An atheist is a kâfir. And when a kâfir converts to Islam, he or she gets the recompense for the good deeds he or she did before embracing Islam. As a matter of fact, when Hâkim bin Hazam embraced Islam, he asked our Prophet what happened to his past good deeds. Our master the Prophet declared:
(You have become a Muslim with your former good deeds being valid.) [Bukhârî]

The erstwhile good deeds of a disbeliever who has embraced Islam are not disregarded, and all of his or her sins are forgiven; moreover, they are changed into thawâb. The Qur’ân al-karîm purports:

(If disbelievers repent, believe in, and do righteous deeds, Allahu ta’âlâ changes their evil deeds into good deeds [their sins into thawâb]. Allah is very forgiving and very merciful.) [Sûrat-ul-Furqân, 70]

Just as the sins of disbelievers are replaced with thawâb (when they become Muslims), so the sins of Muslims are replaced with thawâb. Some related ahâdîth declare:
(The sins of those who remember Allah for His sake are changed into thawâb.) [Imâm-i Ahmad]

(If a person fasts for nine days in the month of Rajab, his sins are changed into thawâb.) [Gunya]

(The one who makes repentance for his sins becomes as if he had not committed them at all.) [Ibni Mâja]

Allah increases rewards
The recompense granted in return for good deeds, charities, and zakât which are done or given for the sake of Allah is, for a single deed, from ten times to seven hundred times as much, or even more than that, depending on the degree of ikhlâs the giver or doer has. The Holy Qur’ân purports:
(The state of a person who spends his property in the way of Allah is like a seed which sprouts seven ears, each bearing one hundred grains. Besides, Allah multiplies further for whomever He wishes.) [Sûrat-ul-Baqara, 261]

(Whoever does a single good deed, he is rewarded with a tenfold recompense for it. But an evil deed is requited only with an equal punishment. No one is treated unjustly.) [Sûrat-ul-An’âm, 160]

(Allah does not do injustice in the least degree [He treats justly in imposing punishment for evil conduct]. He multiplies the thawâb in return for an atom’s weight of good deed and also gives an extra great reward.) [Sûrat-un-Nisâ’, 40]

The following is stated in hadîth-i sharîfs:
(The thawâb recorded for each good deed is from tenfold to seven hundredfold. However, each evil deed is recorded as one evil deed, but if Allah forgives it, it is not recorded at all.) [Bukhârî, Muslim]

(If Allah wills, He makes a single good deed two million good deeds.) [Ibni Jarîr]

(A person who performs jihâd receives seven hundredfold thawâb for his one good deed.) [Bazzar]

(The thawâb recorded for the property spent on hajj is seven hundredfold.) [Bayhaqî]

(Your Rabb is merciful. If a person intends to do a good deed but if he cannot do it, He records it for him as one thawâb. If he does it, He records it for him as from tenfold to seven hundredfold, or even more than this. If a person intends to do an evil deed but if he does not do it, He records it for him as one thawâb. If he carries it out, He records it as one sin. If Allah wishes, He forgives that person.) [Tabarânî]

(The reward for the person who spends his property in the way of Allah is multiplied up to seven hundredfold. No one other than Allahu ta’âlâ knows the thawâb that will be given to a person who fasts.) [Bayhaqî]

(The thawâb for the a’mâl performed within the first ten days of Zilhijja is recorded up to seven hundred times as much.) [Targhib]

(In virtue, one day [of the month] of Zilhijja equals one thousand days, but Arafa Day equals ten thousand days.)
[Bayhaqî]

(Whoever fasts on Arafa Day, the thawâb recorded for him is twice as many as the number of people who have lived from Âdam ‘alaihis-salâm up to the time when the Sûr will be blown.) [Riyâd-un-nâsihîn]

Allahu ta’âlâ’s compassion and favors are countless. He grants a mountain of thawâb for an iota of good deed. Everything belongs to Him, so He bestows whatever He wishes upon whomever He wishes as much as He wishes.

He is with no place
Allahu ta’âlâ is free from occupying spaces. None of the things which we can imagine is He, because He does not resemble anything. However, He uses metaphorical similes in hadîth-i qudsîs so that humans can understand some transcendental matters easily. For example:
(O, the son of Âdam! If you stand up to come to Me, I, in turn, walk towards you. If you walk towards Me, I, in turn, run towards you.) [Imâm-i Ahmad]

(I will be the eyes which see, the hears which hear, the hands which hold things, the feet which walk, and the tongue which talk, of My born servant whom I like. I will give him whatever He wants.) [Bayhaqî]

(Whoever approaches Me by the length of a hand-span, I will approach him by a cubit. Whoever approaches Me by a cubit, I will approach him by the length of two outstretched arms. If anyone comes to Me walking, I will approach him running.) [Bukhârî]

This means to say that Allahu ta’âlâ looks for a means to forgive His born slaves and to grant them thawâb amply. He bestows His endless Jannah upon whoever says the Kalima-i Shahâdat once in a heartfelt manner, preserves it, and dies as a Muslim. If people who have said the Kalima-i Shahâdat do not avoid harâm acts and do not perform acts of worship, then it is very difficult for them to die with îmân. The ones who have died without îmân, in turn, are the dwellers of Jahannam endlessly. If they die with îmân, they will enter Jannah after they suffer the punishment inflicted as the recompense for their sins, or (without entering Jahannam) they enter Jannah by attaining Allah’s forgiveness. But it is necessary to obey Allahu ta’âlâ’s commandments and prohibitions in order to succeed in dying with îmân.

Believers must take a middle path; that is, they must not despair of Allahu ta’âlâ’s mercy, but at the same time, they must not feel safe from His torment.