When prospective homebuyers don’t have a long credit report, mortgage lenders may be skeptical about their ability and willingness to repay debt. However, those who have a thin credit profile may still be able to show they’re worth the risk simply by showing off their nontraditional credit.
Credit.com recently said this could be shown in a number of ways from a P.O. box, a book club membership or even a Netflix account.
Lenders aren’t only looking at a credit score, but they also like to see a certain number of “trade lines” or credit accounts (such as car loans and credit cards). Strong credit profiles usually consist of old trade lines that are still active – such as student loans or a mortgage – and revolving accounts, such as credit cards. Lenders typically like seeing around three trade lines with at least a year long history in an applicants’ credit profile.
For those who come up short on credit accounts, a nontraditional trade line may help support their case, although not all lenders will accept alternative credit accounts.
In a recent article, Credit.com highlighted some alternative trade lines that can be used for those borrowers who may need to show more in their credit profile. Such alternative trade lines may include:
• A storage unit
• Cable or cellphone bill
• Auto or renter's insurance
•Utilities paid (separate from monthly rent)
Data gathered from: Floridarealtors.org "Can watching movies help qualify for a mortgage?"
Josh Parker is the Team Leader of ProFusion Property Group at Keller Williams Realty, Inc., located in Trinity, FL, and an active Tampa YPN Committee Member. ProFusion Property Group specializes in the listing & sale of residential real estate all over Pinellas, Pasco & Hillsborough County. His team has successfully sold over 175 units for their clients in 2012, while maintaining an exceptional “sold price to list price” statistic of 99.08%. For more information, free tips, and free home searches, please visit Josh & the ProFusion Team at www.profusionpg.com!