A Common FHA Mortgage Question: Can Non-Traditional Credit Be Used?

In some cases, yes! There are several benefits of an FHA mortgage. One of them would be the easier credit guidelines that are utilized for mortgage approval.  Credit reports that have credit history and credit scores are referred to as traditional credit.  Is the most often used when lenders underwrite FHA mortgages. Occasionally, credit reports will not have this necessary information since some borrowers choose not to use traditional credit, such as bank credit cards. This type of qualifying requires using non-traditional credit for FHA mortgage approval. FHA underwriters are required to determine a borrower’s short term and long term bill paying habits. When traditional credit is not available, at least three credit references must be used to produce a credit...

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