How to Get a Mortgage with No Credit Score Part 3: Don't Use Big Banks or Mortgage Companies

After 5 years of destroying debt, saving an emergency fund, and saving a big down payment we were ready to buy a house. We knew the amount we wanted to spend and were ready to get a mortgage but we had no credit score... The first thing we tried was to contact a big bank (we use USAA so we tried them first) for a mortgage. After a lengthy online application, several long discussions on the phone, and repetitive explanations of why we have no credit score, we were not successful. We were treated as if we had BAD credit instead of just no credit. No one really knew what to do with us, they were confused as to why we didn't have debt, especially because we could "afford" it. They told us that we did not qualify for a mortgage even though we planned on putting 40% down!  They suggested we contact the department that helps people who cannot afford a mortgage for special government assistance. What? We didn't need assistance, we just needed a small mortgage!

Okay, plan B, we contacted our realtor who suggested his "mortgage lady" who is a mortgage broker that works with several mortgage companies. After explaining that we have no credit score, she went ahead with the paperwork and called us back. She explained that in the 16 years that she had work in the industry she had never seen people who had had good credit and then stopped using it. She said it was impossible to get us a mortgage at that point and that we should go out and get a credit card, put $300 on it and pay it off the next month so that something was on our credit. What?! I have 40% down, I'm going to give you $60,000 and the deed to my house in exchange for $100,000 and you want me to prove I can pay a $300 credit card off? I can prove that we have steady income, pay our bills, have no debt, and can obviously save some money and you want me to get a credit card and pay it off to show I pay my bills? This is complete craziness. We quickly dismissed that idea and prayed about what to do next.

We contacted Churchill Mortgage (Dave Ramsey suggests them) and they were happy to help us but said it usually takes 45 days to get approved with no credit score. We didn't have that kind of time since we had no where to live after moving from overseas.  So, our final choice was to sit down with a real person, at a real bank, and show them real paperwork. This is where we finally saw a light and realized this is where we should have started...