Possibilities of Mortgage with incalculable Credit Score

Mortgage lenders do not just look at credit score -- they also consider your income (eg, paystubs), your assets (eg, bank statements), payment history (eg, utilities), etc. Credit score is just one factor.

So you can get a mortgage without a credit score -- see Can You Get a Mortgage With No Credit History? on nerdwallet -- but you may find it more difficult to get approved, and at a higher interest rate than if you had good credit.

I highly recommend you use a site like Credit Karma to track your score and see the impact of your $10,000 balance. No answer here discussed the nature of a credit score, its composition, and what you can do to improve it. Your score is being impacted by utilization. This is simply the amount owed vs your total credit line.

When I recently applied to renew my HELOC, I saw my utilization was high for the fact that I run most of my budget thru my credit cards. For the next few months, I paid the bill in full, and then some, before the balances were reported. An 850 credit score got me the loan with a 10 minute phone call and copies of my 401(k) and IRA statements. Gaming the system took me from a respectable 790 to the maximum score. In your case, paying the $10K off will put you well over 700.

Note, my credit report still shows accounts I closed in late 2008. If you really wish to go off the grid, there’s a decade delay.

If you are really planning to do this, I suggest you try a few things first -

• rent a car without using the card
• reserve a hotel room without the credit card
• ask your bank what they will do for you if you buy something with your debit card and find the business closed before they shipped your item.

People can, and do, mess up with their cards. I am certain that if a card user starts with one rule, “do not charge any item that you don’t have the cash to pay in full the day the charge hits” that they will fall into the group of responsible card users who use it to their advantage. No different than the cook who knows how to use a cooking knife vs those who slice into their hand while cutting a bagel.

The celebrity and entertainer Dave Ramsey has a view that cards have no responsible use. Clearly, our opinions differ.

Your comment response "buying within 5 years with 20% down," reinforces my opinion that your best path is to simply continue with your plan. Paying the card aggressively will let you be done with it well before you apply for the mortgage.

Maybe search some active personal finance forums or subreddits and try to find people who have actually gotten those small, personal, no-creditscore-needed mortgages in the last 10 years. I would wager those people are unicorns.

I tried to get one a few years ago and it was going to be a major uphill climb. Getting a mortgage with a good credit score was still no cake walk. I asked our mortgage broker about the Ramsey approach and he mentioned it may be possible, just like building your own car from parts and raw materials is possible.

But, you know there are other things I want to do with my time.

Ramsey has a wide dogmatic streak I found to be a turnoff. He has some excellent points but it's all information you can find in numerous other sources.

BTW, his method of paying off your smallest credit card first, no matter the interest rates of other debt you may have isn't great advice either, in my opinion. It's a neat idea for people who truly struggle with personal finance or like buying into a catchy system. However, it may (likely) cause you to pay more interest than attacking other debt with a higher rate.

Work the debt snowball, get rid of the debt and feel great and be free! I did.

I have no current open credit accounts other than my mortgage and old credit accounts (7 or more years old) that are closed paid as agreed, no late payments etc. I have a credit score of 750.

I understand that this is not your situation as you are worried about not having much credit on your credit report after paying everything off.

Dave talks about Manual Underwriting, in which manual means it's not an automated calculate my score and make a yes/no decision, but a human underwriter actually looking at your credit worthiness, possibly ignoring lack of credit accounts. There are companies that do manual underwriting. Probably not the large banks or highly advertised online quick/fast mortgages, but there are those that do.

Also consider finding a smaller local bank or Credit Union and going in and talking with a loan officer to see if there is a more manual process that is not a yes/no based on FICO.

As long as you don't have bad credit (late payments, over extensions, collections, etc) and have whatever proof they request (satisfactory rent payments, satisfactory salary etc) then you should be OK.

I don't do it, but I wouldn't begrudge someone (Dave would) that had one credit card that they used sparingly and always paid in full every month for the sole purpose of building credit. But this could be dangerous depending on your spending habits and personal traits and behaviors. That's what the TMM is aiming to change.

His policy of only paying cash only makes sense if you can't trust yourself with having credit available.

Having a credit card that you pay off in full every month is categorically superior to always paying cash--the only reason not to do this if you are tempted to spend more than you can pay off.

There are simply too many cases where having a credit card is simply useful and there are also the various rewards. Not to mention that in some places it can influence your insurance rates. (Fundamentally, credit ratings mostly measure how careful you are. It's not in the least surprising that there's a relationship between your credit score and how likely you are to be in an accident.)

You do not need to pay interest to have a good credit rating. Our credit ratings are around 800--and there's not one cent of interest ever paid on anything that still appears on our credit reports.