How To Improve Your Chances Of Getting A Mortgage With No Credit Score
When you apply for a mortgage loan to buy a home, one of the key things the bank looks at in order to determine your creditworthiness is your credit score. If you do not have a credit score, then you will have a harder time getting a mortgage. However, you should not let this dissuade you. Plenty of buyers with no credit score are ultimately approved for no-credit financing. You just have to put in a bit more effort. Here are a few ways to increase your chances of getting a mortgage with no credit score:
1. Apply at smaller credit unions
You're more likely to get a loan at a smaller credit union or regional bank than at a large national bank. Large national banks have strict protocols they have to follow when issuing mortgages, and if one of those protocols is not lending to people without a credit score, you have little hope. At smaller banks and credit unions, the employees have more leeway. Even if the credit union does not typically lend to people with no credit, the manager may make an exception for you if you can demonstrate your creditworthiness in other ways.
2. Get a letter from your employer
The most important thing to the bank is that you have the money coming in to pay off your loan. W-2 statements can demonstrate your income, but they are a bit impersonal. They do not tell your bank how stable your job is or whether you can expect to maintain that same salary over time. Consider having your employer write a letter explaining how valuable you are to the company, how secure your job is, and what your income is likely to be for the next few years. This can be a little extra reassurance to the lender that you'll be able to pay back the loan.
3. Save more money to put down
The bank many not want to lend you $350,000 with no credit, but maybe they would be willing to lend you $200,000. If you save a bit more money to put toward your down payment, you won't be asking to borrow as much so there is a greater chance of having your loan approved.
Getting a mortgage with no credit can be tough, but it is certainly possible. To learn more, talk to a smaller bank that regularly offers loans to people in your position.