Some nontraditional credit sources...

Saturday, 12 May 2012 13:45

What are nontraditional credit sources that can be used for borrowers purchasing a home that need to supplement their thin credit file?

A common problem when some are trying to qualify for a mortgage loan is the lack of recent good credit.  If a borrower does not have enough credit or any credit at all reporting on their mortgage credit report, some of our mortgage programs will allow a borrower to prove pay history through alternative sources to supplement the credit report.  Nontraditional or alternative credit sources include but are not limited to the following:

  • Rent – if the borrower can supply the last 12 month’s cancelled checks, it would be best
  • Insurances such as auto, life, medical, supplemental (excluding those paid through payroll deductions)
  • School tuition
  • Payments to retail stores
  • Evidence of reserves of assets built through steady monthly savings
  • Rent to own stores
  • Small finance company accounts
  • Car lot financing
  • Gym or other club membership

If a borrower is looking to use these sources for additional credit, request a credit reference letter from each source covering at least the last 12 months history


There are many lenders in New Hanover, Brunswick, and Pender Counties of NC; some of them well known, but I will say in 9 years as a Real Estate broker who has worked with 20+ lenders... THERE ...