No Credit Scores
There are situations where I run into mortgage loan borrowers with no credit. By having no credit, that means there are no credit scores on all three credit reporting agencies; Transunion, Experian, and Equifax. If you have no credit, thus no credit scores, it can easily be solved by getting two to three secured credit cards and you will get credit scores reporting to all three major credit reporting agencies. However, mortgage lenders will not give you credit towards seasoned credit tradeline requirements until you have had a twelve month credit payment history. The good news, is that even if you do not have credit scores or seasoned credit tradelines that has been seasoned for at least a year, I will be able to help you get a residential mortgage loan approval and you can move into your dream home.
Nontraditional Credit In Lieu Of Traditional Credit
For those mortgage loan borrowers with no credit and no credit scores, they are still be able to qualify for a mortgage loan via nontraditional credit. Nontraditional credit are payment history such as rental verification, telephone bills, utility bills, cable bills, cellular phone bills, and insurance monthly payments. Most mortgage lenders have internal mortgage underwriting overlays where they require only traditional credit but I have wholesale lenders that will accept nontraditional credit for those with no credit and no credit scores. In order to be able to use nontraditional credit in lieu of traditional credit, the mortgage loan borrower needs a one year payment history that can be proven with cancelled checks or automatic payment deductions from the checking account going into the nontraditional creditor such as the landlord, utility company, telephone company, or insurance company. Cash payment is not acceptable. Rental verification is the strongest form of nontraditional credit and has a lot of weight. When you are paying your monthly rental payment, always pay it with a bank check so you can provide proof of payment. Your mortgage underwriter will require that you provide twelve months cancelled checks to prove that you have been timely with making your nontraditional credit payments. Normally, 3 nontraditional credit accounts are required for those mortgage loan borrowers with no credit and credit scores because of having no traditional credit.