How to Get a Mortgage with No Credit Score

February 02, 2024
Waterstone Mortgage offers a variety of loan options for those with no credit history.

Millions of American adults have no credit history, or have a limited or outdated credit history that can’t be scored by traditional credit bureaus such as Equifax, Experian, and TransUnion.

This can cause a roadblock when trying to buy a house, as mortgage lenders typically use your credit report to determine your eligibility for a loan.

Not having a credit score doesn't always mean you have bad credit or can't repay your mortgage loan. At Waterstone Mortgage, we understand this. That's why we provide conventional and FHA loans for people without a credit score.

Why Don’t I Have a Credit Score?

If you have zero credit cards or loans and pay for things only in cash (or with a debit card or checks), you probably will not have a credit score.

A credit score is made up of a few different factors, such as:

  • Payment history – How long have you been a credit user? Have you made your payments on time?
  • Amount owed – How much of your credit limit have you used? How much have you taken out in loans?
  • Length of credit history – How long have you had lines of credit open for?
  • Credit mix – Do you have a mix of credit cards and loan types?
  • New credit – How frequently do you open new lines of credit?

You also may not have a credit score if you’ve had credit cards or taken out loans in the past, but you haven’t used credit in more than 2 years. Similarly, if you are a recent immigrant and haven’t established a credit history in the United States yet, you won’t have a valid credit score.

Another possibility is simply that you’re young, and you haven’t had much experience with credit yet. Maybe you took out a student loan to cover your college tuition, but you haven’t gotten a credit card yet — that may not be enough credit history to generate a credit score.

While these situations (and possibly others) may mean you don’t have a credit score, they don’t mean you’re not ready and able to buy a house, and consequentially take out a home mortgage loan.

Can I Still Get a Mortgage with No Credit?

In short, if you are otherwise qualified, yes!

Waterstone Mortgage offers loan options for those without a credit score, allowing you to qualify for a mortgage based on other indicators of payment history, or payment references.* These can include:

  • Cell phone bill
  • TV/cable or internet bill
  • Rent history
  • Utilities that are not included in your rent payment, such as gas, electric, or water
  • Insurance premiums that are not payroll-deducted (may include medical, auto, life, or renters insurance)
  • Childcare provider payments
  • School tuition
  • And more!

While, of course, a credit score is useful for determining a homebuyer’s ability to pay back their mortgage loan, the above indicators can be extremely helpful in telling your story — which is great news if you’re one to typically pay in cash or haven’t utilized a line of credit in a while.

If you pay your bills in full and on time, your history will speak for itself, and we may be able to qualify you for a mortgage with that evidence.

How Do I Know if I Qualify?

Our non-traditional credit program is available with two loan types: FHA and conventional loans. We can help you figure out which loan type is best for your situation.

Also, keep in mind:

  • These loans are not meant for homebuyers with poor credit. If your credit is less-than-perfect, we have other loan options for you to consider.
  • One of your payment references MUST be a rental housing payment. If you do not have documented proof of current rent payments, you cannot qualify for this program. (So, for example, paying cash for your rent is a no-go.)
  • Payment references must span the past 12 months (and each must be paid at least every three months).

As with any home loan program, there are a lot of details that go into determining if you may qualify or not. For more specific information and to discuss your unique situation, find a Waterstone Mortgage loan originator in your area.

*Payment references should have a minimum of 12 months. This program is not intended to overcome bad or delinquent credit history.