Here are the topics I'll hit on:

• Buying a house in cash
• Getting a mortgage with no credit
• What is alternative credit?
• Which loan programs take alternative credit?
• How to build a credit score quickly

“I don’t have any credit.” -Dave Ramsey

That's nice, Dave.

I'm sure Dave Ramsey can buy a house in cash.

If you have a bunch of cash

If you can buy in cash, then go for it. I actually want to touch on this for a second before I get into mortgages, because being a cash buyer opens up a lot of opportunities.

If you want to buy a house on a deal, then it will usually require cash. Here's what I mean.

Bank-owned (REO) properties

These are foreclosed homes that a bank or lender now own.

Banks often list REO homes through agents or on their own sites, and they tend to sell “as-is” at a discount.

HUD also lists some on the HUD Home Store site (especially HUD-owned foreclosures). Cash buyers often love REOs because banks want a quick sale.

Just remember these homes may need repairs.

Wholesaler deals

Real estate wholesalers are investors who find distressed or under-market properties, put them under contract, and then sell (assign) that contract to a buyer.

Wholesalers don’t usually carry loans, they assign the purchase to you, often for a fee (around 5–10% of the price).

To find wholesalers, network at real estate investor meetups or online forums (like r/realestateinvesting or BiggerPockets)

If you have cash, wholesalers need buyers like you, so you might get access to deals not on the open market.

Subscribe to a newsletter from wholesalers and they'll probably send you opportunities frequently.

Advantages buying on MLS or from owner

For Sale By Owner (FSBO): This is when the homeowner sells directly, without an agent.

FSBO homes can be easier to negotiate on price or terms (sellers save agent commissions). You’ll deal directly with the seller, which can speed things up. Just be sure to use a good purchase agreement and get a lawyer to help with paperwork.

If you're buying the way 88% of homebuyers go about it (MLS, using an agent) then you'll be able to write up really aggressive contracts. Cash offers = a quicker close less obstacles. You're at a huge advantage with cash.

Here's for the rest of us that need a mortgage...

If you need a mortgage, but don't have credit

If you don’t have cash for a full purchase, some lenders will still consider you through manual underwriting.

That means a person (not an automated credit check) reviews your application.

They'll want the same things as usual to verify your income, employment, and assets.

• W2s
• Pay stubs
• Bank statements

Here's what they'll take instead of a full credit report...

Alternative credit

Alternative credit means proof that you pay your bills on time, without the credit report.

Here are a few ways.

Housing payment history

Rent.

Bring canceled rent checks or bank statements, and consider getting a letter from your landlord verifying timely payments.

Utilities

Regular payments on utilities, phone, internet, insurance or even child care can demonstrate you’re reliable with bills. For example, 12 months of on-time cell phone or utility bills can be documented and used as alternative credit.

Underwriters sometimes verify this by calling your landlord or utility company.

Savings / Assets: Having money in the bank (reserves) helps. Lenders like to see 3–6 months of mortgage payments in savings. It shows you can handle bumps in income.

Compensating Factors: A big down payment, a low debt-to-income ratio, or co-signers can help compensate for having no traditional credit scorer.

Essentially, you need to prove you aren’t a risky borrower even without a score.

This is the “alternative credit” or “non-traditional credit” approach. It means documenting all the ways you’ve responsibly handled money, even if it didn’t involve credit cards or loans.

It takes more paperwork and time than a regular mortgage.

Expect a lengthier approval process.

But it does work for borrowers with thin or no credit files, as long as you have solid proof of income and bills paid on time.

Loan programs that accept alternative credit

FHA

FHA rules allow manual underwriting if you have no credit score.

Manual underwriting, like mentioned before, means an actual person review it and that person will check more boxes.

Manual underwriting will usually want lower debt to income ratios. If your ratios are higher, you'll need a few compensating factors. Some compensating factors can be:

• Rent payment is similar to your new mortgage payment
• Cash reserves on hand
• Extra money coming in that isn't being used toward the application to qualify

These compensating factors are on top of the alternative credit requirements I went over earlier.

I want to make a note here that very few lenders will do this. I've seen lenders offer a mix, where they'll take a borrower and co-borrower, and will allow one to get by without credit as long as the other borrower has credit.

But not often do they accept a sole borrower, or both borrowers, without a credit between them.

This is why I think working with a mortgage broker is better. Unique scenarios require someone who represents multiple lenders.

Fill out this form to be connected with a mortgage broker.

VA

If you are eligible for a VA loan (for military veterans, active-duty service members and some spouses) then you could possibly get a mortgage with $0 down and 0 credit.

Similar to FHA, VA guidelines also allow manual underwriting (possible compensating factors needed) with alternative credit.

Not all lenders do this. Connect with a mortgage broker to have a higher chance of working with a lender that will accept a VA loan with 0 credit. Here's the form to fill out to get connected.

USDA

A USDA loan is a mortgage that is only offered in more rural, developing areas. It has strict income and debt-to-income limits, and does not require a down payment.

Similar to VA, you could walk into this house with $0 down and 0 credit. But rather than qualify through military status, you'd have to live in a specific area, and your income to qualify has to fit in a certain box.

Similar to VA and FHA, you'd qualify using non-traditional credit, and go through a manual underwriting process.

Not all lenders offer the no-credit solution. Fill out this form to be connected with a mortgage broker who represent multiple lenders and can find the right fit for you.

Non-QM

These are non-qualified mortgage loans (sometimes called portfolio loans) offered by banks or specialty lenders.

They’re not backed by Fannie/Freddie or federal agencies, so lenders can set their own rules.

Many Non-QM products cater to “non-traditional” borrowers.

They often accept alternative documentation (like bank statements, WVOE letters, 1099s, asset statements) instead of the standard taxes and W2s.

Non-QM loans typically require larger down payments (often 20% or more) and charge higher interest rates, since the lender is taking more risk.

They can be pricey, but they’re an option if you need flexibility that other programs can’t offer.

They set the rules, so there is likely one who will take a no-credit borrower. I'm going to say it again. Work with a broker. Here's the form.

Consider a co-signer

If you're running into a wall, trying to qualify without credit, then consider a co-signer.

If a family member or partner has a strong credit score and income, adding them to the loan can help qualify you. Just remember they’ll be legally responsible for the loan too.

It opens up the number of options you have if at least one borrower has a score.

How to get a score quickly

If you're trying to do this without a score because you feel like you're staying true to your principals, then I hate to break it to you. Once you get a mortgage, you'll get a credit score.

There are very few scenarios where you can get lending for a house and maintain a 0 credit score.

Your lender will most likely report to the credit bureaus.

So you might as well get a score beforehand to make it all easier.

Here's the quickest way.

Piggyback

You can borrow someone else's credit history by being added on a credit card as an authorized user.

This depends entirely on how the credit card company reports to the bureaus.

AMEX, for example, could add you as an authorized user, but they'll open up a new tradeline, rather than copy and paste the history from the original borrower.

A new tradeline doesn't give you the history. So you'll want to ask the creditor beforehand how they report authorized users to the bureaus.

I'll give you a quick example. Pretend your dad has had the same credit card for 20 years. It's the only thing on his credit report, and he has an 800 score.

If he added you, you'd likely get that same 800 score within a month.

That's what I mean by piggybacking.

If they don't let you piggyback on the history, the you might as well open up your own card.

Open a credit card

Just because you want to build credit, it does not mean you have to pay interest.

If your goal is to spend $0 interest, then don't get a car loan. They charge you interest on day 1.

Open a card, and don't use it if you don't want to.

Though it may close down for inactivity, it will help you get a credit score in the meantime.

To build credit, not pay interest, and not have it close down for inactivity, just use it and pay it off immediately.

That's it.

After opening a card, you'll have a credit score within 6 months. It might be in the mid 600s, but you'll at least have a score.

Your credit report might be considered "shallow" for some lenders, for only having one tradeline on the report. But I've helped people with shallow reports and had no issue.

To summarize

To make this work you'll want one of these three things to make it easier:

• a pile of cash
• a mortgage broker
• a credit score

If you want a mortgage broker connection, fill out this form