How to Get a Loan With No Credit

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If a person has no credit, the Federal Housing Authority, or FHA, still allows for alternate credit trades. Find out how mortgage brokers or loan officers can help a buyer to build credit sources with help from a financial specialist in this free video on loans and money management.

Part of the Video Series: Loan Information
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Video Transcript

Hi, this is Matt McKillen with Innovative Financial Group. The question posed to me today is 'how do you get a loan if you don't have any credit?', no established credit reporting to the credit agencies. Through a program to purchase properties, which is through FHA--the Federal Housing Authority--they still do allow for what's called alternate credit trades. Now the alternate credit trade is where I, as the mortgage broker, or originator, loan officer, must help build credit sources for that buyer, to prove that they do pay people on time. Now some of the resources that we have to build alternate credit trades is we may ask for the borrower to get letters from their utility companies, whether it be their power, their water, perhaps their cable company. What I've also been able to do in the past is, most everybody pays a cellphone bill, but it doesn't report on the credit reports. So I've been able to get printouts for my buyers from their cellphone companies, that they do pay their cellphone bills on time. Another great source for an alternate credit trade is to go to the people that you pay your automobile insurance. Let's face it, everybody has auto insurance on their cars, and they must make a payment on that, whether it be monthly, or every three months, or once a year. So these are different avenues that we have to help people build credit to purchase a home if they don't have any credit available on their bureaus. Again, my name is Matt McKillen, I'm with Innovative Financial Group.

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