Buying a House with No Credit: What You Need to Know

If you’re hoping to buy a house but don’t have a credit history, the process can feel a little overwhelming. Without a track record of borrowing, most lenders don’t have enough information to approve a mortgage right away. 

But here’s the good news: you can build the credit you need—and it might take less time than you think. With a few smart moves and the right support, you’ll be in a much stronger position to buy your first home. 

In this blog, we’ll walk through what it means to have no credit, the steps you can take to build it, and why working with a local lender can make all the difference. 

Can you buy a house with no credit?  

When you apply for a mortgage, lenders want to feel confident that you’ll be able to repay the loan. One of the main ways they assess this is by reviewing your credit history. It shows how you’ve managed money in the past—whether you’ve made payments on time, how much debt you carry, and how long you’ve had credit accounts open. 

Without a credit history or score, lenders don’t have that track record to reference. That can make it nearly impossible to get approved or limit your loan options, especially with traditional mortgage programs that rely on credit scores to qualify borrowers. 

A good credit history can also help you: 

• Qualify for better loan programs 
• Secure lower interest rates 
• Reduce the amount you need for a down payment in some cases 

That’s why it’s worth taking the time to build your credit before applying for a mortgage. It can open more doors and save you money in the long run. 

No Credit vs. Low Credit 

If you’ve never used a credit card, taken out a loan, or opened any type of credit account, you likely don’t have a credit history at all.  

No credit is different from bad credit. Bad credit means you’ve used credit before but have had issues like missed payments, defaults, or high balances that have negatively affected your score. No credit just means there’s nothing to evaluate yet. 

While both situations can make it harder to qualify for a mortgage, building credit from scratch is often easier than trying to repair a damaged credit score.  

How to Build Your Credit to Buy a House 

If you don’t have any credit history yet, don’t worry— there are a few straightforward ways to get started. The goal is to show that you can borrow money and pay it back responsibly over time.  
 
The key with any of these methods is consistency: keep balances low, make payments on time, and avoid opening too many accounts at once. Over time, these habits will help establish the kind of credit history lenders want to see. 

1. Open a secured credit card. 

A secured credit card works like a regular credit card, but it’s backed by a deposit you make upfront, usually a few hundred dollars. That deposit acts as your credit limit. Use the card for small purchases and pay it off in full each month to start building a positive payment history. 

2. Take out a credit-builder loan. 

Credit-builder loans are small loans designed specifically to help people build credit. Instead of receiving the money upfront, you make monthly payments toward a savings account, and once it’s paid off, you get the funds. These loans are typically offered by local banks or credit unions. 

3. Become an authorized user on someone else’s card. 

Ask a trusted family member or partner if you can be added as an authorized user on one of their credit cards. As long as the card issuer reports authorized users to the credit bureaus, you can benefit from their positive payment history. 

4. Use rent and utility reporting services. 

Some services can report your on-time rent, phone, and utility payments to the credit bureaus, which helps fill in some of the gaps in your history. While not a replacement for traditional credit lines, it’s a helpful boost when you’re just getting started. 

How long will it take to build credit for a mortgage? 

The timeline for building credit can vary, but the good news is that you don’t need years of history to get started. 

In most cases, you can generate a credit score within three to six months of opening your first credit account, like a secured credit card or credit-builder loan, assuming you use it regularly and make on-time payments. 

That said, most mortgage lenders prefer to see a bit more than just the minimum. Here’s a general idea of what to expect: 

• 3–6 months: You may have a score, but options could still be limited. 
• 12+ months: Many lenders will consider your application if you’ve shown consistent, responsible credit use. 
• 18–24 months: A stronger, more established credit history may open up better loan terms and interest rates. 

With steady progress, you’ll be in a much better position when you’re ready to apply for a mortgage. 

Why Working with a Local Lender Matters 

When you’re just starting to build credit, working with a local lender can make a big difference. Instead of relying solely on a credit score, local lenders are often more willing to take the time to understand your full financial picture. 

They may look at things like:  

• Your employment and income history 
• Your savings and budgeting habits 
• Proof of consistent rent or utility payments 

That personal approach can be especially helpful if your credit history is thin but you’re financially responsible in other ways. Plus, local lenders often offer more flexibility and direct communication throughout the homebuying process—something that’s hard to find with big, online-only mortgage companies. 

Final Thoughts 

If you don’t have a credit history yet, buying a home might take a little more planning, but it’s absolutely within reach. By taking steps to build credit and getting your finances in order, you can set yourself up for success when the time comes. 

Remember: credit isn’t built overnight, but with consistent habits and the right tools, progress can come quickly. And when you’re ready to start the mortgage process, working with a local lender can help ensure that your full financial story— not just a credit score— is taken into account. 

Start small, stay consistent, and don’t be afraid to ask questions along the way. Your path to homeownership starts with the first step—and you’re already on your way!