How long to establish sufficient credit rating to qualify for a mortgage?
Let’s say someone is fresh off the boat. How long would it take for this person to build up a decent enough credit rating to qualify for a mortgage? Alternatively, are there banks that will offer mortgages to people with no US credit history but a decent job? Thanks in advance for your insight.
Have you ever had an American Express card outside the US? Corporate cards count. While you can’t transfer credit history per se, Amex will consider the first time you got any of their cards to be your “member since” date. They used to then report all your accounts in the US as being open from that date. In my case my old corporate card was opened in Dec 2013 and they reported my personal US card as opened on Jan 1st 2013. 😎 I have heard that Amex no longer does this back dating by default but they could likely be convinced. Open an account with First Tech Federal Credit Union. They should be able to get you a credit card with a low 5 figure limit with nothing more than an offer letter. In any case, it is feasible (but difficult) within 2-3 years or less. It will take 6 months of history before you even have a FICO score. After the 6 months you will want to open some sort of installment account. A car loan would be best. It doesn't have to be a fancy car, or even much money. You can even pay the loan off early. Do not apply for credit for at least a year before applying for the mortgage. Whenever possible, avoiding dinging your credit score. Eg getting a phone plan? Most carriers will accept a cash deposit of around $200-$300 which they would hold for about 6-12 months then return to you.
Every bank (or leech as some people call them) gets to determine their own lending standards. A credit score is a guideline and not the final arbiter. That said, a credit union is more likely to provide this than a bank as they often use “relationships” as an additional barometer.
Unfortunately Fannie Mae/Freddie Mac get to set the rules for the most part, as banks don’t like holding assets that they can’t easily sell. The standard score is FICO 2 which is an outdated model not used anywhere.
Banks have the ability to hold loans on books and many do. These are called portfolio loans and is a primary distinction between credit unions & community banks vs the bigger banks.