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Originally Posted by Rodney
I've said this before and I'll say it again: I bought a house without any help from the credit bureaus. I had never had a credit card, nor bought anything on a time payment,; on the other hand, I had never been late with utility or medical bills. The credit bureaus didn't have me on their radar at all.
What I did have was:
* The downpayment, and significant additional savings.
* A good job.
* A couple of landlords who vouched for me as a tenant who paid on time.
The mortgage company was a little surprised when the credit bureaus told them they had nothing on me; but I explained that I had no credit history because I always paid cash. And they accepted that. They simply asked me to state as much in a letter, which I did. I suppose they wanted some legal assurance that I wasn't a super con man who'd whipped myself up a new identity.
In short: you do not need a credit history to make major purchases. All credit cards do is allow you to buy things that you don't have the money to buy. And this is unwise.
I do keep debit cards for convenience, but they draw directly from my accounts.
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Although this may be true, I can tell you from my professional experience that very, very seldom will you obtain the best mortgage financing out there without a high credit score. There certainly are programs out there for people without any credit history reporting to the bureaus, however - nearly every one that I am aware of will have an increase in the rate to represent the additional risk the lenders are willing to take on without a credit score.
Additionally, in order no obtain financing without credit history, you typically have to be in a very, very good position financially speaking - a very large downpayment and significant liquid cash is almost always required....
Just figured I'd throw that out
Also, depending on the utility company that services your area, some do not report to credit reporting agencies.
Don't get me wrong, it certainly is possible to obtain a mortgage without a credit score, but it is much, much easier with a high credit score, and it is very likely you will get better rates and terms