Our discussion for this week looks deceptively simple but it is really complex. You have a young friend who has never had credit. This person does not really want credit and is doing fine paying cash for everything. However, there is a problem: your friend wants to get a home mortgage in two years. Devise a strategy for your friend of sensibly building consumer credit for a mortgage lender to evaluate.
Here’s how to get a home loan with no credit:
Ask your landlord or service provider to report on-time housing and utility payments to one of the three main credit reporting agencies.
Get a loan backed by the Federal Housing Administration.
Consider a smaller lender or a credit union.
No credit history? A payment history can help
Even if you have no credit history from a mortgage lender’s point of view, your payment history is out there; it’s just a little harder to locate, making it more difficult for a computer to generate a credit score.
For example, Experian, one of the three major credit-reporting agencies, accepts rental payment history information from third-party processors as proof of credit history, but it’s up to your landlord to opt in to the system.
Although some larger multifamily apartment complexes are already reporting this information automatically, private landlords of single units or a handful of properties might not realize they can do their tenants this service.There’s a nominal monthly fee for landlord...
[Solved] You have a young friend who has never had credit. This person does not really want credit and is...