What if I Have No Credit?

On occasion, a borrower will not have enough credit references to obtain the loan they wish to secure.  If this is the case for you:

  • Start by opening small lines of credit that report to one of the three major CRAs
  • And make purchases that can be paid off easily
  • If you do not already have a checking or savings account, open one.
  • Your bank or credit union may be able to provide you with a credit card account once you have established a history with them as a customer.
  • Ask your family or spouse to add you to their credit card account.
    • By adding your name to an established line of credit, you can ride on their coattails, so to speak, and gain points by using that person’s credit history.

It is also wise to start saving money for the down payment on your home.  The lender will look at your application more favorably when you are able to come to the table with a 20% down payment.  Bear in mind, there are certain loan programs available that permit a percentage of gift money for down payment, which can come from a relative, or even the person selling the home.