Mortgage Resources

Alternative Sources for Establishing Credit in Colorado

Establishing credit in Colorado can be a daunting task; especially for prospective homeowners with minimal or no credit background.   Often people believe that if they have no credit or even little credit that securing a home loan is not possible, but this is not true.   It is definitely possible but takes some legwork on the part of the prospective buyer. A typical lender looks for a credit rating of 600 and above before considering you for a mortgage but there are some alternative sources that can help you secure a mortgage loan, despite your lack of credit.

Rental Records

The rent you have been paying on a monthly basis–on time–can go a long way as evidence that you can be trusted with a loan.  It is a representation of how you have been handling your monthly rent and can prove that you are diligent in paying on time.  Provide the lender with either cancelled checks or a letter from your current landlord.

credit score coloradoUtilities

Similarly to rent, you probably have utilities that you pay on a regular basis.   These may include water, internet, electricity, phone services and cable.   By proving that you regularly pay these bills on time and in full you are proving that you are reliable and trustworthy with your financial obligations.

Insurance

Any form of insurance can come in handy if you do not meet the minimum requirements for loan considerations by financial institutions. You can use your car, health and/or house as an alternative source of credit provided they are not deducted automatically from your paycheck.

Medical Bills

Medical bills are usually high bills so updated medical statements that show you pay off your balances can be a large asset to your credit application.  When a medical bill statement is added in with utilities and rent statements, you are showing a lender that you have the ability to pay off different accounts at the same time.

Child Care Payments

Your chances of qualifying for a loan are determined by the amount of evidence you can present to a loaning agency. If the provided evidence indicates a clean history of prompt payments then you stand a better chance of obtaining a loan. Do not disregard your child’s tuition fee payments or any other payments relating to childcare when applying for a loan. They form a good ground for convincing lenders of your credit worthiness.   The above alternatives may look like a lot of work to gather but obtaining the records really isn’t that difficult.  A simple phone call to a service provider will get you a printout of your payments over a year’s time in just minutes.  If you are paying rent to an individual, you will be required to submit 24 cancelled checks as a proof of rent payment for the last 2 years; if you have not saved these your bank can help you quickly print them. These alternative sources of credit are acceptable ways of establishing credit for individuals with no or little credit background.  All of the above alternatives are effective, but only if they can be validated so be truthful with your lender.