Nontraditional Credit Tradelines For Mortgage With No Credit Scores

Can You Qualify For A Mortgage With No Credit Scores?

This Article Is About Nontraditional Credit Tradelines To Qualify For Mortgage With No Credit Scores

Can You Qualify For A Mortgage With No Credit Scores? Borrowers who do not have a credit score are those who do not have any credit tradelines that report on the credit bureaus. If you do not have any credit cards, installment loans, auto loans, or other credit that report on the three credit bureaus, you will most likely not have a credit score. However, borrowers with no credit scores can qualify for a mortgage at Gustan Cho Associates. We can use non-traditional credit tradelines in lieu of traditional credit tradelines and help those without a credit score qualify for a mortgage. In this article, we will discuss and cover qualifying for a mortgage with no credit scores.

Importance Of Credit When It Comes To Qualifying For A Mortgage

Is cash king? Not when it comes to qualifying for home loans. Lenders want to see an overall credit payment history from all borrowers when they are processing and underwriting borrowers.

Many lenders require credit tradelines from their borrowers. Many folks who have gotten into trouble with credit and/or filed bankruptcy normally do not want anything to do with credit. However, if you do not have any credit established after bankruptcy you will not have a credit score. This is not good when it comes to qualifying for a mortgage. Gustan Cho Associates can help borrowers without a credit score through the use of non-traditional credit.

What Are Credit Tradelines?

Credit tradelines are credit accounts the borrower has active and reports to all three credit reporting agencies:

  • Transunion
  • Experian
  • Equifax

In order to be considered a credit tradeline, it has to be seasoned and reporting to all three credit bureaus for at least 12 months. It is highly recommended consumers have at least three revolving credit accounts such as credit cards and two installment loans.

Examples Of Traditional Credit Tradelines

All traditional credit tradelines report to all three credit bureaus.

Below are examples of traditional credit trade lines that report to credit reporting agencies:

  • Credit card accounts
  • Automobile loans
  • Student loans
  • Department store credit accounts
  • Revolving credit cards 
  • Any other credit accounts that report on credit bureaus

Lender Overlays On Credit Tradelines

Why do lenders overlap with trade lines of credit

Depending on the mortgage lender, many require that in order to count as active credit tradelines, the account must have been active and in good standing for at least 12 months. Just opening up three credit card accounts right away will not count as three credit tradelines. Again, a twelve-month seasoning requirement is mandatory to be considered a credit tradeline by lenders. Yet,  there are some mortgage lenders who require a minimum of 24 months in seasoning requirements for it to count as a credit tradeline. Credit tradelines are not agency mortgage guidelines. FHA, VA, USDA, FANNIE MAE, FREDDIE MAC does not require any credit tradelines to get an approve/eligible per automated underwriting system (AUS). Tradelines are lender overlays by individual lenders.

Qualifying For Mortgage With Credit Tradelines Not Seasoned 12 Months

FHA, VA, USDA, Fannie Mae, Freddie Mac does not require minimum credit tradelines for a mortgage borrower to get an approve/eligible per Automated Underwriting System Findings. Credit Tradelines are lender overlays where each individual mortgage lender requires. Every lender has different credit tradeline requirements. Gustan Cho Associates does not have any credit tradeline requirements. Gustan Cho Associates is a mortgage company licensed in multiple states with no overlays on government and conventional loans. GCA Mortgage Group just goes off Automated Underwriting System Findings and has zero lender overlays on FHA, VA, USDA, and Conventional loans.

Qualifying For A Mortgage With Little To No Credit Tradelines

Can you qualify for a mortgage with no credit tradelines? The answer to the above question is yes.  Borrowers can qualify for mortgages without any credit tradelines. However, if a borrower has no credit scores, some sort of credit tradelines is required. In cases where borrowers have no credit scores, then we can use nontraditional credit which are tradelines that do not report on the credit report.

  • Gustan Cho Associates welcome mortgage loan applicants with no credit
  • We will accept nontraditional credit in lieu of traditional credit
  • Lenders who accept borrowers with no credit scores will require three nontraditional credit tradelines
  • Many folks who do not have credit tradelines also do not have credit scores

Borrowers who have no credit scores can still qualify for a residential mortgage loan with at least three nontraditional credit.

What Are Nontraditional Credit Tradelines?

What Are Nontraditional Credit Tradelines?

Nontraditional credit tradelines are credit accounts that do not report to the three credit reporting agencies.

  • Cell phone accounts
  • Phone bill accounts
  • Cable television accounts
  • Utility accounts
  • Insurance accounts
  • Rental verification

The above are all examples of nontraditional credit tradelines.

Verification Of Rent

Rental verification is probably the strongest and most important nontraditional credit tradelines with the most weight.

  • Make sure making monthly rental payment to pay it with a check so it can be documented
  • Verification Of Rent is only valid if it can be proven with 12 months of on-time canceled checks and/or 12 months bank statements
  • Renters who are renting from a registered property management company can get verification of rent form, VOR, provided by the lender and completed and signed/dated by the property manager in lieu of canceled checks/bank statements
  • Cash payment does not count as rental verification even with a paid receipt from the landlord

Home Buyers with no credit scores need to qualify for a mortgage with a direct lender with no overlays, please contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at gcho@gustancho.com. The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays.

1 Comment
  1. Valentin Garcia

    We file for Ch 11 on May 2012, was confirmed. Now we are under a repayment plan that is due to discharge on Nov 2022. We would like to purchase a home.

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