No Credit Score Home Loan - Developing a Credit History

No Credit Score or Not Enough Credit

The lack of a No Credit score mortgage applicants credit history, or the mortgage applicants decision to not use credit, may not be used as the basis for rejecting the FHA loan application.

Some FHA mortgage applicants may not have an established credit history and don't have a credit score. For these mortgage l applicants ,including mortgage applicants who do not use traditional credit, the FHA mortgage lender must obtain a Non-traditional credit report from a credit reporting company to  develop a credit history from 3 exceptable lines of Non Traditional Credit, Examples include: 

1. Must have 12 months canceled rent checks, Money orders to verify timely payment history, according to credit qualifying guidliness this is the most imporant exspense.

·Other means of non traditional credit include letters from the following credit providers:

o gas

o electricity

o water

o land-line home telephone service, and

o cable TV.

·Insurance coverage (for example, medical, auto, life, renter's insurance (not payroll deducted)

·Payment to child care providers - made to a business providing such services

·School tuition

·Retail stores - department, furniture, appliance stores, specialty stores

·Rent to own - (for example, furniture, appliances)

·Payment of that part of medical bills not covered by insurance

·Internet/cell phone services

·A documented 12 month history of saving by regular deposits (at least quarterly/non-payroll deducted/no NSF checks reflected), resulting in an increasing balance to the account

·Automobile leases, or

·A personal loan from an individual with repayment terms in writing and supported by cancelled checks to document the payments.

Do you have No Credit Score Home Loan Questions? Fill out a Quick Response form or (Apply Now). 

The More ammunition we have to prove you pay your bills the better.

Letters from a direct service providers must be on letter head and include the following:

·Creditor's name

·Date of opening

·High credit

·Current status of the account

·Required payment

·Unpaid balance, and

·Payment history in the delinquency categories (for example, 0x30, 0x60, and so on).

As an alternative, we may elect to use a non-traditional mortgage credit report developed by a credit-reporting agency, provided that the credit reporting agency has verified the existence of the credit providers and that the non-traditional credit was extended to the mortgage applicant.  We also must verify the credit using a published address or telephone number to make that verification.  

When we analyze a mortgage applicant without traditional credit we use a the  basic hierarchy of credit evaluation in the manner of payments made on previous housing expenses, including utilities, followed by the payment history of installment debts, and then revolving accounts.  Generally, NO score mortgage applicants with no late housing or installment debt payments are considered as having an acceptable credit history, unless there is major derogatory credit on his or her revolving accounts.

Have Questions? Fill out a Quick Response form or (Apply Now). .