Mortgage Loan Q & A

How do I refinance my house without a credit score?

I have excellent credit and zero debt. My house is paid for, debt free, and I do not have any outstanding debt. I have had loans in the past, but I’ve paid them off. Therefore, I do not have a credit score. I want to tap into the equity on my house and take out a second mortgage on my home, but the bank says that I do not have a credit score. Does anyone have any ideas on how I can get a competitive rate with no score?

First, if you are truly saying you have “no” credit score, you must have NO credit activity for the last 7 years at least; maybe longer. If you paid off a loan within that time frame AND it was a consumer loan reported to the credit bureaus, then it should be on your report. But for arguments’ sake, let’s say you are right (like Dave Ramsey on daveramsey.com who pays cash for everything and therefore has NO credit score).

Find someone or banker who “manually” underwrites loans. That means they don’t merely rely upon credit scores for the extension of credit. If your house is paid off, obviously you have equity in the property and you have income. So therefore, some one will loan you money against your house. You may need to acquire the payment history from your previous loans to show to your prospective lender. Also, some banks don’t report to credit bureaus. I have borrowed money for two cars from a bank and paid them back religiously but no report shows on my bureau because they don’t report. I can always go back to them to borrow money if I need it. You might try going back to the folks you borrowed money from and had a good history. They might be willing to lend you the funds.

Dan The Mortgage Man – Credit Scores 101

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