Home Buying in 95631>Question Details

Mary Ann Kel…, Home Buyer in Auburn, CA

Is no credit worse than bad credit, or about the same?

Asked by Mary Ann Kelley, Auburn, CA Tue Sep 4, 2012

My husband has never had credit cards nor loans, but has always had a steady job with okay income. How will this affect getting a loan on our first home?

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It's impossible to answer without knowing what you mean by bad credit. If you have credit scores in the low 600s, you can still qualify for multiple loan options. If you don't have any credit history at all, you simply may not be able to qualify for any loans without a co-signer.
Web Reference: http://www.archershomes.com
2 votes Thank Flag Link Tue Sep 4, 2012
Bad Credit is much worse than having no credit. Its harder to fix bad credit than to build good credit. If you are lacking tradelines on your credit report in order to get financing, then open a credit card and use it on simple things like gas. Pay it off for a few months and then it will start reporting. This will start building you good credit history and show you are a responsible borrower.

If you have bad credit, you will have to rebuild your trust to lenders. This takes time and patience.
1 vote Thank Flag Link Tue Sep 4, 2012
LOL! Kinda reminds me of my dear ole Dad. He didn't believe in credit. An Iowa Farm Boy, WWII Navy Flier through and through. Never borrowed a dime in his life and couldn't believe he was borrowing $4100 @ 1.78 % with a monthly payment of $47/mth. Get off of it, get over it and get on with it.
0 votes Thank Flag Link Wed Sep 5, 2012
Bad Credit is definitely worse than no credit.- Financially, spiritually, and even for getting a loan.
Even with no credit card history your husband should have a record of having paid other things. Loan officers call this "alternative credit" These payments include: 1. Rent 2. SMUD 3. PG & E 4. Cable Bill 5. Internet Bill, 6. Phone Bill .7. Car Insurance payments, 8. Renters insurance payments 9. Storage locker payments 10. Club membership dues 11.Any recurring payments made to any business
Verifying these is a little more work for the loan officer and your husband, but worth it.
Even with no credit score, he can quickly build one with a real small credit card for the next time you need to make a store purchase. Even a gasoline company credit card can help establish the credit score.
0 votes Thank Flag Link Tue Sep 4, 2012
Jim Walker, Real Estate Pro in Carmichael, CA
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