Posted on: 04th Jul, 2009 12:39 am
I was looking at some houses online for sale, first time buyer. When I would call about these houses, they would typically tell me the first step before I even started looking was to get prequalified for a loan.
I had been looking at houses a year or so ago (not sure, may have been two years), and had got prequalified then. But never purchased anything and stopped looking for a while.
So anyways I simply googled "home loan" and started calling a couple places to get preqaulified, as I had done in the past. I called Bank of America and Ditech.
The shocking thing is, I was turned down in both attempts because, and I'm not even sure the exact wording but, when they got around to pulling my credit, they said something to the effect of I was showing "no credit" or "no credit score". Due to this they would not even talk to me about a loan. This isn't the same as "bad" credit, just "no" credit!
The unbelievable thing is I am extremely frugal and always pay my bills on time. I also carry two credit cards. The thing is I paid off my cards a couple years ago, and have only maybe used them a few times since then. I also paid cash for my vehicle back in 2001, so I haven't had a car payment. I rent an apt, and have the normal car insurance/utility/CableTV bills anybody would have. I also used to have student loans even, though I paid them off some years ago. So it's hardly like I dont use credit.
I am pretty outraged and in disbelief at this nonsense. So I'm being punished for paying my bills TOO well?
I mentioned getting prequalified over the phone a couple years ago, and at that time there was no problem, and I recall my credit scores being in the 700 range.
I have a decent job easily in range of the houses I'm looking at, have been at my job for almost ten years, I have saved money for at least 10% down, so everything is in order here. Except I'm apparently disqualified out of hand over this garbage.
I'm not even sure what I'm supposed to lack here, I mean, am I now REQUIRED to use my credit cards even though I dont want to? How absurd. About the only thing I lack that is even unusual is, I have no car payment. One thing.
Anyways, I talked to my sister about this and she mentioned using my cards to pay bills, then paying them off, she seemed to think this should bring my credit back within three months, since the credit reports are quarterly apparently. The thing is I barely have three months. I need to buy this year to get the 8K stimulus credit. I'm told it takes a month to close on a house, that would leave me two months to find and purchase a house, if all went well. I want to be able to be on the lookout for a good deal from NOW until the end of the year. Not sit on the sidelines for three precious months.
Also, one of the places I called, Bank of America, talked about the possibility of doing some sort of "special" credit report where apparently they look into your utility bills and other non-normal credit sources, again I didn't 100% follow but that was the gist of it. There were several drawbacks to this though, one, a $349 "non refundable" fee was mentioned, and this has to be done through an agent and the nearest agent was 100 miles away. That's assuming I wouldn't just be turned down again after going through this method. Ditech didn't even mention this, they just flat turned me down instantly upon pulling my "no credit" credit.
Anyways, just wanted to vent and see if anybody on here is familiar with this entire situation (it must be reasonably common, right???) and can advise me in any way.
I had been looking at houses a year or so ago (not sure, may have been two years), and had got prequalified then. But never purchased anything and stopped looking for a while.
So anyways I simply googled "home loan" and started calling a couple places to get preqaulified, as I had done in the past. I called Bank of America and Ditech.
The shocking thing is, I was turned down in both attempts because, and I'm not even sure the exact wording but, when they got around to pulling my credit, they said something to the effect of I was showing "no credit" or "no credit score". Due to this they would not even talk to me about a loan. This isn't the same as "bad" credit, just "no" credit!
The unbelievable thing is I am extremely frugal and always pay my bills on time. I also carry two credit cards. The thing is I paid off my cards a couple years ago, and have only maybe used them a few times since then. I also paid cash for my vehicle back in 2001, so I haven't had a car payment. I rent an apt, and have the normal car insurance/utility/CableTV bills anybody would have. I also used to have student loans even, though I paid them off some years ago. So it's hardly like I dont use credit.
I am pretty outraged and in disbelief at this nonsense. So I'm being punished for paying my bills TOO well?
I mentioned getting prequalified over the phone a couple years ago, and at that time there was no problem, and I recall my credit scores being in the 700 range.
I have a decent job easily in range of the houses I'm looking at, have been at my job for almost ten years, I have saved money for at least 10% down, so everything is in order here. Except I'm apparently disqualified out of hand over this garbage.
I'm not even sure what I'm supposed to lack here, I mean, am I now REQUIRED to use my credit cards even though I dont want to? How absurd. About the only thing I lack that is even unusual is, I have no car payment. One thing.
Anyways, I talked to my sister about this and she mentioned using my cards to pay bills, then paying them off, she seemed to think this should bring my credit back within three months, since the credit reports are quarterly apparently. The thing is I barely have three months. I need to buy this year to get the 8K stimulus credit. I'm told it takes a month to close on a house, that would leave me two months to find and purchase a house, if all went well. I want to be able to be on the lookout for a good deal from NOW until the end of the year. Not sit on the sidelines for three precious months.
Also, one of the places I called, Bank of America, talked about the possibility of doing some sort of "special" credit report where apparently they look into your utility bills and other non-normal credit sources, again I didn't 100% follow but that was the gist of it. There were several drawbacks to this though, one, a $349 "non refundable" fee was mentioned, and this has to be done through an agent and the nearest agent was 100 miles away. That's assuming I wouldn't just be turned down again after going through this method. Ditech didn't even mention this, they just flat turned me down instantly upon pulling my "no credit" credit.
Anyways, just wanted to vent and see if anybody on here is familiar with this entire situation (it must be reasonably common, right???) and can advise me in any way.
Hi
The situation seems to have arisen from the fact that you haven't used your credit cards, you have no car loan or any other type of loans to pay off. In that case, I think what your sister suggested is correct. You ought to start paying your bills using your credit cards and then pay them off. You should check your credit report and see if the payments you've been making for your utility bills etc are being reported properly. It may be possible that you've made the payments, but they are not reported to the credit bureaus. Even if you had no credit history in the recent past, the lender can check your payment history like whether you have paid your utility and other bills on time. So, I don't think the fact that you haven't had any credit recently should pose a problem to your qualification for a loan. The lenders do have the opprtunity to look into your non-formal credit resources and ascertian whether you are creditworthy. So, the first thing you should do is, review your credit report and check for any inaccurate information and also check if the payments have been reported to the bureaus. Then, use your credit cards to pay off the bills and pay them off as early as possible. This should bring your credit back on track.
The situation seems to have arisen from the fact that you haven't used your credit cards, you have no car loan or any other type of loans to pay off. In that case, I think what your sister suggested is correct. You ought to start paying your bills using your credit cards and then pay them off. You should check your credit report and see if the payments you've been making for your utility bills etc are being reported properly. It may be possible that you've made the payments, but they are not reported to the credit bureaus. Even if you had no credit history in the recent past, the lender can check your payment history like whether you have paid your utility and other bills on time. So, I don't think the fact that you haven't had any credit recently should pose a problem to your qualification for a loan. The lenders do have the opprtunity to look into your non-formal credit resources and ascertian whether you are creditworthy. So, the first thing you should do is, review your credit report and check for any inaccurate information and also check if the payments have been reported to the bureaus. Then, use your credit cards to pay off the bills and pay them off as early as possible. This should bring your credit back on track.
Interestingly, I checked my own credit score from this website called quizzle.com..it said I had a credit score of 709 (from Experian)
So i clearly do have a credit SCORE, at least from one agency. So I'm still not really clear on what these loan people were pulling up to state that i had "no credit" or whatever term they were using.
I'm going to try quicken loans after the weekend, see if they tell me anything different.
So i clearly do have a credit SCORE, at least from one agency. So I'm still not really clear on what these loan people were pulling up to state that i had "no credit" or whatever term they were using.
I'm going to try quicken loans after the weekend, see if they tell me anything different.
Having no credit score (if that is even the case) does not mean that you can absolutely not get a loan, there are many many ways to quickly build credit if necessary, I would love to have a chance to look at doing a pre-qualification for you and see what is really going on? Feel free to e-mail or call with any questions!