With the wave of buyers coming back into the market that have had a foreclosure, short sale, or bankruptcy it will make it for an interesting year. The adventure of mortgage origination and underwriting is getting more interesting with borrowers who paid off all their bills, tossed their credit cards and have been working within their personal budget for about 2 years and possible with that having a 0 credit rating.

Many main stream loan offers will tell this type of buyer that they need to establish another credit rating by opening up several credit cards and start using them.

Not really. Even now with the new mortgage regulations you can get a mortgage with 0 a credit rating. Many mortgage companies are just not willing to work with a 0 credit rating buyer because they have to run the loan through manual mortgage underwriting. Personally compare this to an individual who is self-employed and has no W-2 income.

I recommend to all my clients who are looking to buy and need financing to help them buy to get pre-qualified. When it comes to pre-qualifying a 0 credit buyer it can take a little longer because it has to be done manually.

To find a lender who is willing to work with a buyer who has no credit score is a bit tricky but there out there. Before you contact any lender to help you and you happen to be one of the buyers who don’t have a credit score be prepared to have at a minimum of a 20% down payment for your dream home.

Also find other forms of alternative credits for your lender like rent payment, or utility payment. When you had medical bills, and they are paid in full, have the creditors write a letter on their letter head stating the bills are paid in full. Your cell phone bill is one of them that will work as well. Make sure you also have 4 current consecutive paystubs available as well and 2 years of tax returns. You will need at a minimum of 4 alternative forms of credit.

Don’t have lenders tell you that you must have a credit score to buy a home. You don’t. You might need a bigger down payment and alternative forms of credit and a lender who is willing to truly work with you. When they are not willing to work with non-existing credit score, and they tell you that you have to open an in-store credit card of apply for a credit card to “establish” credit it is time to find another lender….

Last but not the least; this is not to be considered legal or financial advice and you still should consult your legal and financial advisor before making any legal or financial decision.