If you have insufficient credit you may still be able to qualify for a FHA home mortgage loan...
If you can not document or prove credit history through traditional means that would normally appear on a traditional credit report (credit cards, car loan or lease, personal loans etc) FHA home loans allow you to qualify using "non-traditional" credit to verify and establish credit history. This practice is appropriate when a borrower has insufficient credit trade lines with Equifax, Trans Union and Experian.
Non-traditional credit means verifying credit history through alternative means such as rent payments, a telephone or cable bill, health insurance, utility bills etc. A non-traditional credit analysis may not be used to enhance any poor credit history and is solely a means of establishing credit for a borrower that doesn't have any. One must have a 12 month history of non-traditional credit to qualify and no history of 30 day+ lateness.
Once a 12 month history of non-traditional or alternative credit has been established, FHA prefers the credit references to be verified by a credit bureau. The credit bureau will then compile the information into a standardized non traditional mortgage credit report (NTMCR) in the same manner as they would with traditional credit trade lines.
It is important to know that while FHA does allow for alternative credit qualification it is solely at the lenders discretion as to how a borrower will qualify using alternative credit. Some lenders choose not to allow the use of alternative credit on their FHA loans and the lenders who do may impose other stipulations and restrictions regarding this type of loan qualification.
