| When applying for a mortgage loan, your credit score | | | | bankruptcies, foreclosures, collections, judgments, etc. |
| plays a huge role. Thus, many people choose to | | | | All of these factors contribute to very low credit |
| establish a good credit history before applying for a | | | | scores. Low credit scores equal higher interest rates, |
| mortgage. Having a low credit score will not | | | | which will increase mortgage payments. Fortunately, |
| necessarily prevent you from getting a mortgage. | | | | there are loan programs in which FICO scores are not |
| Likewise, it's possible to get a mortgage with no credit | | | | a primary factor. |
| history. Before applying for a no FICO score home | | | | What are No Credit Score Home Loans? |
| loan, it is important to understand how these loans | | | | If you have bad credit or no credit history, you may |
| work, and how to qualify. | | | | qualify for a no credit score home loan. In many |
| Purpose of Credit Scoring | | | | instances, homebuyers earn a sizeable income, in |
| Without credit reports and credit scoring, potential | | | | which they can afford to buy a home. However, |
| lenders would be unable to assess an applicant's | | | | because of past credit history, many will not qualify for |
| creditworthiness. Credit reports contain very detailed | | | | a conventional home loan. Rather than wait until credit |
| information about our credit history. For example, the | | | | improves, these individuals may apply for loans without |
| length of credit history, number of credit accounts, | | | | using credit scores. |
| outstanding balances, etc. Along with creditor | | | | Try using one of ABC Loan Guide's |
| information, reports also contain a three digit number. | | | | Recommended Poor Credit Mortgage Loan |
| This is the FICO score. Credit scores range from 300 | | | | Companies. |
| to 850. Higher scores obviously means better credit. | | | | Many mortgage lenders offer these sorts of loans. |
| How Credit Scores Affect Mortgage Loan Approvals | | | | However, homebuyers must meet certain criteria. For |
| Years ago, obtaining a mortgage loan with poor credit | | | | example, most lenders will only finance 70% or 80% |
| was rare. However, lenders have begun offering | | | | on a no credit score loan, thus the homebuyer must |
| flexible programs, which make it possible for more | | | | have a down payment of approximately 20% - 30%. |
| families to qualify for home loans. Among these | | | | Secondly, most lenders require full documentation on |
| includes a variety of mortgage loans especially for | | | | these loans. Thus, homebuyers needing a no doc or |
| people with bad credit. | | | | stated income loan may not qualify. |
| Bad credit generally consists of several late payments, | | | | |