Buying a Home With No Credit is Possible
Thinking about buying a home, but don't have any credit history?
Not having any credit history or a credit score can be a hindrance to getting a home loan as credit is a large factor that is reviewed when applying for a home loan.
However, with CityWorth Mortgage, buying a home with no credit is still possible! There are ways to quickly build credit or show your ability to make payments in order to qualify for a mortgage, even without any credit history.
How to Buy a Home With No Credit
Your credit history shows lenders your ability and trustworthiness repay your debts on time and in full. It also shows them that you aren't financially overextended and that you have the means to repay the money they are loaning to you. If you do not have a credit score, showing monthly, on-time payments of utilities, bills, or even Netflix can still qualify you for a home loan!
How To Build Credit History
Credit history is made when companies or organizations communicate to credit bureaus about your payment history with them. One way to do this is by asking your landlord to report your on-time rent payments each month to at least one of the credit bureaus. Many of the larger landlords will gladly do this for you.
However, if your landlord is unable or unwilling to report to credit bureaus, consider applying for a credit card to build up your credit history in the traditional way. You can get a credit card, purchase a small item on it, and leave a low balance to create credit.
Don’t give up your dream of owning a home if you prefer not to get a credit card. Government-backed FHA home loans are backed by the Federal Housing Authority, and they have different minimum credit score requirements!
According to their website, "lack of a credit history, or the borrower’s decision to not use credit, may not be used as the basis for rejecting the loan application."
Instead, FHA guidelines say that the applicant's eligibility should be based on the "whole package"– not just as a credit score! Another benefit of FHA loans is that they only require a 3.5% down-payment to purchase.
Call CityWorth Mortgage today to see what you can qualify for with less-than-perfect, limited, or even no credit score! We will help you find the best options so you can achieve the American Dream of homeownership.
* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.