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Posted: 4/6/2011 7:42:39 PM EDT
I am trying to get pre approved for a mortgage and am having a hard time since I have always paid cash for everything. I have zero history since i have never had a credit card. I would need to finance about $110k and my mortgage payments would be less than my currant rent payments. Without going into too much financial detail I have been able to save up enough to buy a new cheap car all done while paying more in rent than a mortgage payment would cost. I do also have a few other investments I would use to buy the property.

I have talked to a few places locally and they all say that since I have no credit history they wont loan to me. One place did say that they can verify my credit history using my utility bills, car insurance payments and cell phone payments.

To add insult to injury, in order to improve my credit I applied for a credit card at my bank and was denied. Had to apply for a secured credit card at Wells Fargo and write them a check for my intended spending limit.

It looks like trying to be responsible and live within my means has caught up to me.

Anyone know anything about verifying credit by alternate means or another way to get a loan fast?

I found a property I like and want to buy and my lease is up at the place I am renting soon (end of may) and I don't want to have to renew or go month to month.
Link Posted: 4/6/2011 8:04:21 PM EDT
Originally Posted By ErikM98:
I am trying to get pre approved for a mortgage and am having a hard time since I have always paid cash for everything. I have zero history since i have never had a credit card. I would need to finance about $110k and my mortgage payments would be less than my currant rent payments. Without going into too much financial detail I have been able to save up enough to buy a new cheap car all done while paying more in rent than a mortgage payment would cost. I do also have a few other investments I would use to buy the property.

I have talked to a few places locally and they all say that since I have no credit history they wont loan to me. One place did say that they can verify my credit history using my utility bills, car insurance payments and cell phone payments.

To add insult to injury, in order to improve my credit I applied for a credit card at my bank and was denied. Had to apply for a secured credit card at Wells Fargo and write them a check for my intended spending limit.

It looks like trying to be responsible and live within my means has caught up to me.

Anyone know anything about verifying credit by alternate means or another way to get a loan fast?

I found a property I like and want to buy and my lease is up at the place I am renting soon (end of may) and I don't want to have to renew or go month to month.


What you're describing is alternative data, which is stuff like rent, utilities, television, phone, insurance, et cetera. I think TransUnion and LexisNexis do these kind of credit reports. If not, I believe there's consumer credit agency called something like PBRC, where you can enroll yourself into their program.
Link Posted: 4/6/2011 8:08:23 PM EDT
Join the club.  You might try the credit unions for a card.  Look for one with no annual fee, and use it some but keep it paid off.  But that will take some time.

Another option would be to get a co-signer.  Once you go for a while and maintain good credit, I think you can have them taken off.

Or put at least 20% down.
Link Posted: 4/6/2011 10:18:59 PM EDT
The $110k loan would be with about 25% down. Some of my own money from savings and some from an education trust. I am very financially stable and live well within my means.

I'll mention to the mortgage person when I meet up about the other credit services and see if they can get a report from them. Looking up PBRC lead me to microbilt.com, I am not seeing anyplace for a consumer to sign up just for businesses to get reports or be able to report alternative data.

Most of my afternoon was spent calling every place I pay a bill to asking them for a letter stating that I have been with them for over a year and am in good financial standing with no past due payments to use as a reference. So far I have one report being mailed from the gas company, one was emailed to me from my car insurance company and verizon gave me a phone number the lender would need to call to get a report faxed to them. So far everyone has been very helpful when I tell them my situation and what I am trying to do which helps relieve some stress. Going to try and get one from the electric company tomorrow.

With the broker I talked to I mentioned my father would be willing to cosign on the loan with me and she said that that would help if I had shaky credit but since I have none at all they have no basis to go on that I am responsible with money. So since I have no score not even a cosigner would help.

One thing my father mentioned was doing a Land Contract or a Contract to Deed. Basically give the seller a large down payment, a few monthly payments and after a determined amount of time (6months to a year) give them a balloon payment for the remainder of the cost of the home. I am not sure if i like that idea but I'm not going to rule it out just yet.

Kinda wish I got a credit card or 2 when I was 18 and everyone was sending me applications. Would have made this whole process a hell of a lot simpler.
Link Posted: 4/7/2011 4:53:29 PM EDT

Try these guys:

Churchill Mortgage

Supposedly they would be able to get you a mortgage with alternative underwriting...
Link Posted: 4/13/2011 7:00:18 PM EDT
Originally Posted By Redcat:

Try these guys:

Churchill Mortgage

Supposedly they would be able to get you a mortgage with alternative underwriting...


Tried them and no go. They still wanted to go off a credit score. I gave them quite a few referances of my history and they replied it would be best to wait 90-180 days after getting the secured credit card to get a credit score to get a loan with.

Since it looks like my only option is to get some type of credit score whats a FAST way to build credit? I should be getting something minor from the secured credit card on my report in about a month but I am wondering if taking out a small personal loan (payday loan or auto title loan) and paying it back in a week would get reported to my credit sooner? I keep hearing 3 lines of recent credit activity is a good place to be.

So on a scale of 1-10 how stupid would I be to get a $500 title loan on my car and pay it back in a week just to get a bit of a credit score? I would imagine I would lose about $25 due to fees doing it.
Link Posted: 4/18/2011 12:39:42 PM EDT
Originally Posted By ErikM98:
Originally Posted By Redcat:

Try these guys:

Churchill Mortgage

Supposedly they would be able to get you a mortgage with alternative underwriting...


Tried them and no go. They still wanted to go off a credit score. I gave them quite a few referances of my history and they replied it would be best to wait 90-180 days after getting the secured credit card to get a credit score to get a loan with.

Since it looks like my only option is to get some type of credit score whats a FAST way to build credit? I should be getting something minor from the secured credit card on my report in about a month but I am wondering if taking out a small personal loan (payday loan or auto title loan) and paying it back in a week would get reported to my credit sooner? I keep hearing 3 lines of recent credit activity is a good place to be.

So on a scale of 1-10 how stupid would I be to get a $500 title loan on my car and pay it back in a week just to get a bit of a credit score? I would imagine I would lose about $25 due to fees doing it.




Title loan places don't report credit results.  Won't help you.  

Do you know someone who could add you to their credit cards as an authorized user?  You basically piggyback on their good payment history to build your score up.  

Check department store cards like Walmart.  They might be able to give you one.  

It's gonna take time to build a score.  Hate to say it, but you should have been working on this before now.  Yes it sucks that being responsible is bad!! It's the American way!!!!
Link Posted: 4/19/2011 8:58:47 PM EDT
Originally Posted By ColtRifle:

Do you know someone who could add you to their credit cards as an authorized user?  You basically piggyback on their good payment history to build your score up.  


I do... Do you have any idea how long it would take to reflect on my credit score? Any card better than others to piggy back off of?
Link Posted: 4/21/2011 6:27:00 AM EDT
it would take 45 days perhaps to show up on your credit report.  Best card would be the one with the highest limit, lowest balance, and oldest.

Otherwise OP, welcome to the mortgage mess of 2011.  Even people with FICO's in the 800's are having difficulty getting approved.  Plenty of underwriters wanted 20% down, three years of tax returns, 1 year of bank statements, and take the middle credit score from a 3 bureau report.

There really is nothing wrong with credit cards, used properly.  Off the grid is off the grid, until you need to borrow some of their money.  Then it's back in the game.
Link Posted: 4/24/2011 3:38:56 PM EDT
My dad talked to amex and a card in my name is coming to me this week. I am talking with the realtor about a bridge loan for about 6 months to get credit built up while moving into a house in the mean time. That should give me plenty of time to build credit and with buying stuff for the house give me a chance to use my cards a bit. Got 2 other cards coming, one from chase and a secured one from wells fargo once they realize i live where i say i do.

The bridge would be at a higher rate... but if i am going to be spending $1500 on rent in 2 months, I would rather spend the same on interest for the bridge loan and have the house I want. Both ways I am still on financially the same.
Link Posted: 4/25/2011 5:39:46 PM EDT
You are pretty much screwed for doing the right thing. It sucks, but with out credit history, you can't buy anything. And you won't be able to build credit to be able to get a loan for a house for at least a year or two, if not more. Its a silly cycle. If I was lending money, I'd rather lend to someone like you, who knows what they can afford, rather then some idiot who has no money, and just puts everything on plastic that they can't afford. But what do I know?
Link Posted: 4/26/2011 3:43:09 PM EDT
take out a small loan, make all payments, and you'll have credit

I was in the same situation as you 12 months ago, now I'm about to purchase my first house
Link Posted: 4/28/2011 1:04:33 AM EDT



Originally Posted By MikeEagle12:


take out a small loan, make all payments, and you'll have credit



I was in the same situation as you 12 months ago, now I'm about to purchase my first house


Yeah.  house prices aren't going to go up in the next year OP.  just wait and build credit.  with that kind of down payment and some creedit you should be able to get a good mortgage.



When I needed to get credit I got a secured card and used the crap out of it then got a khols car(department store). used that a few times and payed it off, then the bank gave me a real credit card . I just kept using the cards and paying them off every month.  I had to buy a lot of crap I didn't really need to buy at the time but I got my score from no credit history  to just over 700 within a year and got my first house.  
 
Link Posted: 4/29/2011 8:18:42 AM EDT
You said you were responsible and did the right thing by paying cash for everything, but that's not really true.

It is actually irresponsible of you to have no credit history, then expect a bank to loan you a good deal of money because now you need it.  A credit history is something built over years and years.  The bank wants some comfort that you will pay them back.  You have no way to prove to them that you will.

You say you paid cash for everything and it shows you are living within your means and are responsible.  Guess who else pays cash for everything?  People that can't be trusted with credit.  They HAVE to pay cash because no one will loan them a dime.

If you want a credit history, start with secured credit cards and department store cards.  Go to a credit union and see if they will loan you 25% of the value of your paid for car and pay it back over a year.  This will get you a start on a credit history and make the bank more likely to loan you a bunch of cash for a house.

As for the "have someone add you as an authorized user on their credit card to get their full history added to your credit report" trick, I'm not sure that works anymore.  I think the credit card people figured that out and aren't transferring that history, because after all, YOU didn't make those payments, the original card holder did.

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