Can You Buy A Home With No Credit?

Posted on: 27 September 2017

If you have no credit, then this means you have no credit history for a lender to go by when determining whether or not you are credit worthy. This puts you in a harder position when it comes to buying a home, but it isn't hopeless. You can learn about some of the options you may have available to you by reading this helpful guide on buying a home with no credit.

Rent to own: One of the ways you can purchase a home with no credit is to find someone willing to rent to you with no credit and have a realtor help you go over a rent to own contract if the owners are willing to do this with you. One of the downfalls to this is you won't have the house in your name until you have paid it off completely.

Go for sale by owner: If you purchase a house that is being sold as a for sale by owner home then the owner may not care about the fact that you have no credit. As long as they feel comfortable with you, then they may decide to take the chance since the home would go back to them anyways if you defaulted on the agreement.

Work with a lender to find a loan program that may work with you: You should talk to lenders about programs they know of that may work for your situation. They may be able to find a loan program for you that will take other things about your situation into consideration that allow them to forgive the fact that you have no credit. They may require you to have a large down payment or collateral. They may also be able to use things like your positive rental history, your stable employment and other factors to prove your credit worthiness.

Start trying to establish credit now: One of the best things you can do to start trying to establish credit as soon as you even start thinking about buying a home. You may need to get a secured credit card at first. Make sure you always pay the credit card bill on time and make sure you keep your credit usage under 30%. Keep in mind, you don't want to open a lot of new credit lines at once because this can actually result in a low credit score. Start slow with one credit line and use it to build your score up steadily.