I work with many first time home buyers... twentysomethings who get it that with mortgage rates so low and prices so low, it must be a great time to buy a home. And they are right, it is a great time to buy a home.
Many of these twentysomethings have done the right thing and steered away from racking up a lot of debt. That, too is fantastic.
So what's the problem?
Big problem... many can't qualify for a mortgage loan... Even if they have good steady employment and money in the bank.
Why? Because they have been so careful to not have a bunch of debt, they also don't have a credit history!
No one can get a mortgage loan without a credit history.
While it's true that you can get an FHA loan using "alternative" credit sources such as rent history, cell phone bills, car insurance payments, etc., you need to have two years worth of receipts for these types of sources. Do you have that?
It's far easier to open a gas card, a department store card, and a Visa or MasterCard (you need three lines). Use each judiciously and pay them off and on time monthly, for about a year, and you'll build the credit history you need.
Just be very careful not to rack up debt! Debt is not good. Credit history is good.
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