If you have no credit or limited credit it is possible to use "nontraditional credit" to establish a credit history. Remember that nontraditional credit cannot take the place of derogatory credict. I wrote a blog specifically on this topic which is as follows:
What are nontraditional credit sources that can be used for borrowers purchasing a home that need to supplement their thin credit file?
A common problem when some are trying to qualify for a mortgage loan is the lack of recent good credit. If a borrower does not have enough credit or any credit at all reporting on their mortgage credit report, some of our mortgage programs will allow a borrower to prove pay history through alternative sources to supplement the credit report. Nontraditional or alternative credit sources include but are not limited to the following:
•Rent – if the borrower can supply the last 12 month’s cancelled checks, it would be best
•Insurances such as auto, life, medical, supplemental (excluding those paid through payroll deductions)
•Payments to retail stores
•Evidence of reserves of assets built through steady monthly savings
•Rent to own stores
•Small finance company accounts
•Car lot financing
•Gym or other club membership
If a borrower is looking to use these sources for additional credit, request a credit reference letter from each source covering at least the last 12 months history
If you have little credit, you will need to work on building credit. My suggestion is to speak with a lender who has information on building credit. I've had clients who, in the same situation, began with a small gas card, charged something small and paid it off. You may also want to look at the websites of the 3 credit bureaus and research options for building credit. If you have not purchased a home, there is a first-time homebuyer seminar planned at the Conroe Chamber of Commerce this Wednesday and I would encourage you to attend to learn the steps in purchasing a home. Hope this helps, but please feel free to call with questions.
There are typically County and State Housings Programs for first time buyers, which you may qualify for. They require little down, and understand the idea of little or no credit. In Colorado it's the CHAFA program.
There is a balance between credit score and money deposit to put down on purchasing a home. Usually the better is your credit, the less money you have to put down on buying a home and vice & versa. Therefore it w'd be easier for you if you don't have a lot of money to put down to purchase a home. Also the better is your credit, the better or lower interrest rate you may get so your monthly payment will be less. Your other option is to work hard to improve your credit usually by paying bills on time or not carry a lot debts
or a lot of credit cards.
When buying a house, especially for the first time, there are a lot questions that need answers. Consumers searching homes for sale in Texas can reach out to the Homes.com community of real estate agents and professionals for answers. By offering answers to first time home buyers, Texas real estate agents can demonstrate value and build credibility. Registered users can even set alerts for local coverage areas in order to be contacted when questions are posted in areas of choice. Other tools of particular interest to first time home buyers include the Homes.com Texas home values tool, the mortgage rates section, and the mortgage calculator.