How do I refinance my house without a credit score?

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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?

  1. Reply
    Major Mortgage Lender
    June 26, 2011 at 10:40 am

    Many mortgage loans do not require credit scores. Typically, FHA loans and loans provided by the Federal National Mortgage Association (Fannie Mae) do not require credit scores. In addition to your past credit history you may also provide alternative credit histories for these loans to help you qualify such as utilities, cellular phone bills, and car insurance. A consistent savings history is also acceptable as alternative credit.

    You may be running into more problems by looking for a “second mortgage”. More often than not these mortgages are credit score sensitive. However, if you have a small locally owned bank who makes thier own decisions or a credit union you belong to coupled with NOT trying to take a high percentage of your equity out in cash you may find some takers.

  2. Reply
    June 26, 2011 at 11:24 am

    I’ve never heard of not having a credit score after all your debt is paid off, but maybe it can happen. Are you sure you have no credit open at all? Credit cards, anything? To get the best interest rates in the market you need to have a credit score. You can contact “hard money” lenders to get cash without a credit score but the rates and fees are higher than a traditional lender. If it is an emergency need for money, I’d probably go the hard money way. If you can wait, it wouldn’t be a bad idea to open one or more credit cards to re-establish your credit history and refinance in the future.

  3. Reply
    June 26, 2011 at 12:09 pm

    Pull your credit reports and review them for yourself. If you’ve had loans in the past, its hard to believe that you “have no credit score.”

  4. Reply
    June 26, 2011 at 1:04 pm

    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 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.

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