Waterstone Mortgage has unveiled a new non-traditional credit program, which enables homebuyers with no credit history to qualify for a home loan.
The company said that prospective buyers with no credit history can now apply for a mortgage based on other payment backgrounds, including cellular phone bills, rent, utilities, and insurance premiums.
Over 26 million Americans have no credit score, according to the Consumer Financial Protection Bureau’s research. Meanwhile, 19 million people have a limited or outdated credit history that traditional credit bureaus cannot score. Consequently, nearly 18% of American adults are “credit invisible,” which means they either have a limited credit history or it is non-existent.
“While a credit score is certainly very useful for determining a homebuyer’s ability to pay their mortgage payment, other payment indicators – such as bills that are consistently paid in full and on time – can be extremely telling,” said Kim Newby, senior vice president of investor relations and product development at Waterstone Mortgage.
Waterstone has made the new program available with its conventional, FHA, USDA, or VA loan options.
“Of course, the Non-Traditional Credit Program is ideal for borrowers who only use cash, debit, or personal checks on a regular basis,” Newby said. “But it’s also designed for those who have had credit cards or loans in the past, but who haven’t utilized credit in more than two years. Also, recent immigrants who haven’t yet established a credit score in the United States could benefit from this program, as well as young adults and recent college graduates who are just beginning to build their credit.”