FHA Loans With No Credit Tradelines | Non-Traditional Credit
FHA Loans With No Credit Tradelines Using Non-Traditional Credit
Does HUD Require Minimum Credit Tradelines on FHA Loans?
How Do Lenders Approve Mortgage Loan Applications?
To qualify for FHA loans with no credit tradelines, lenders need to use non-traditional credit. Lenders use the past credit and payment history of borrowers to determine their payment habits and patterns. The chances are if the borrower religiously pays their monthly payments on time and has a long history of paying all of their bills on time, the borrower will continue to pay all of their bill on time going forward. This is why credit tradelines are important. A credit tradeline is a credit account the borrower has reporting on their credit report.
What Is Considered a Credit Tradeline?
To be considered a credit tradeline, the borrower needs to have a history with the creditor for at least 12 months. Borrowers can qualify for a mortgage with no active credit tradelines. If the borrower has no credit scores because there are no credit tradelines that are current or in the past, lenders can use nontraditional credit tradelines to qualify for an FHA loan. Nontraditional credit tradelines are creditors that do not report the consumer payment history to the credit bureaus. Examples of nontraditional credit tradelines include utility bills, insurance bills, tuition, and other monthly bill payments that do not report to the three major credit bureaus