When applying for a home loan with an Arizona Mortgage Lender, some buyers need to “beef” up their credit profile. Due to the fact that Many borrowers have little credit history sprucing up credit sounds impossible to many. However, Alternative Credit can help those with slim credit profiles.
Alternative Credit vs. Traditional Credit
Traditional credit history refers to the credit data reported to the 3 major credit bureaus. For example:
- Auto loans
- Credit cards
- Student loans
- Mortgage loans
However consumers without traditional credit often feel stuck. The great news – they may not be! In these cases alternative credit is a solution.
What is “Alternative Credit”?
Alternative credit is the opposite of traditional credit from a reporting stance. In other words, alternative credit comes from creditors you pay that do not report to the 3 major credit bureaus. For example:
- Car Insurance
- Cell Phone
- Gym Membership
When considering alternative credit lenders require a few things. First, a borrower must have made payments for at least the previous 12 months to the alternative creditor. Second, all payments must have been on time. On time means no 30 day (or greater) late payments.
By Jeremy House