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No Credit Score Loan Process: Manual Underwriting

Congratulations on being one of the 45 million Americans who have chosen to live free from a FICO® Score. Living a debt-free lifestyle is a huge accomplishment and not an easy one. You deserve a pat on the back!

A lot of weight is put on a FICO® Score because it’s a quick way to provide insights into your credit history and determine the ratio of your credit card balance compared to your actual credit limits. In a traditional loan process, the credit report provides a fast risk assessment, but if you don’t have a credit score because you live a debt-free lifestyle you need to go through a non-traditional loan manual underwriting process.

What is the manual underwriting process?

Here’s the general loan process:

A manually underwritten loan requires more documentation and a little more time because additional credit documentation needs to be reviewed by an underwriter

What documents are needed for manual underwriting?

There are many types of credit that can be used to develop a non-traditional credit history. If you don’t have a FICO® Score you need to provide at least 4 examples of documents with a history of consistent payments over a 12-month period. Don’t forget—there’s a big difference between no FICO® and low FICO®.

Here are some examples of non-traditional credit sources:

  • Housing payments, such as rent
  • A 12-month history of deposits to checking or savings with an increasing balance
  • Utilities, such as electricity, gas, water, telephone service, television, and internet service providers
  • Medical insurance coverage (excluding payroll deductions)
  • Automobile insurance payments
  • Cell phone payments
  • Life insurance policies (excluding payroll deductions)
  • Payments for household or renter’s insurance
  • Payments to local stores, such as department stores, furniture stores, and appliance stores
  • Rental payments for durable goods, such as automobiles
  • Payment of medical bills
  • Payment of school tuition
  • Payments for childcare

If your credit score is zero or if you just have questions about no-score loans, connect with us today!