You’ve heard the story before about your friend or co-worker, or even a family member, who somehow finds a way to get through most of their life with no credit scores.

Whether it was accomplished intentionally or accidentally, it’s still impressive these days to avoid being electronically tagged by the big three credit bureaus of Equifax, Transunion and Experian.

In today’s ridiculously strict underwriting environment, you might therefore believe that it would take a holiday credit miracle to earn a home loan approval with no scores.

But with a little bit of research and the right file structure, anything can happen. In fact, the lending solution for this scoreless scenario doesn’t involve any magical elves or flying reindeer to fix.

The answer can be found using the FHA’s “non-traditional” government lending product. Although, you still need to be careful, because there are typically no exceptions or discretionary decisions made by your lender to assist you.

This means in order to increase your chances of receiving a loan approval, your file submission must be well organized and neatly put together for your lender to review.

For example, the FHA prefers that all non-traditional credit references be verified by a credit bureau and reported back to your lender as a non-traditional mortgage credit report (NTMCR) in the same manner as traditional credit references similar to items like credit cards or auto loans.

Only if a NTMCR is impractical or there isn’t a service provider available to offer one, may your lender choose to instead obtain an independent verification of any trade references.

However, any of those trade references must have a 12-month history to be considered sufficient and should be formatted in a similar fashion to traditional references that include the creditor’s name, date of opening, high credit, current status of the account, required payment, unpaid balance and payment history in the delinquency categories.

In addition, the report shouldn’t include subjective statements such as “satisfactory” or “acceptable.”

In order for your lender to determine that you have sufficient credit references to help evaluate your bill paying habits, your non-traditional credit information must include rental housing history for 12 months with no 30-day late payments.

It needs to be verified with cancelled checks or through a property management company. Plus, your lender will require two further credit reference ratings for 12 months.

The most common credit references are usually from utility companies. This might require you to do some research to find out which ones are excluded and included in your rental housing payment.

If excluded, you should be able to use payment history for gas, electric, phone, water or TV bills to help build your NTMCR. Alternatively, payments made for insurance premiums, day care providers, school tuition, medical bills not covered by insurance, rent to own programs, personal loans made to you by an individual or even a documented 12-month history of deposits made into your savings account, could all work to satisfy this requirement.

Chris Salese can be reached at or (707) 363-4439. He is a licensed California mortgage banker (NMLS 254469/1850 CA BRE 01377933/01215943) and equal housing lender.


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