What if I have no credit history, will a lender consider my situation?

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What if I Have No Credit History


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Some people always pay in cash. They just don't borrow money. While this can be a safe way to conduct your affairs, paying cash in full for a house is difficult - and rare.
For people who prefer cash, a mortgage is the first loan they are likely to encounter. When it is time to apply for a mortgage, the cash-payer has no credit history for the bank to evaluate; this makes banks nervous.

If you don't normally borrow money, there are other ways to prove that you are financially responsible. “Alternate credit” is a way to prove that you pay your bills on time, even if you have no credit history.

There are some bills you pay that do not involve debt. Your phone bill, cable and utilities are examples. Alternate credit is how you show the bank - through these bills - that you pay on time, even if you have never borrowed money. Take your bills to the mortgage lender; it is even better if you can bring the cancelled checks that go with them. This will make it easier for the bank to see that you can handle the responsibility of a mortgage.