Can I still qualify for an FHA loan even if I don't have any credit history?

Neither the lack of credit history nor the borrower's decision not to use credit may be used as a basis for rejecting your loan application.

FHA recognizes that some prospective borrowers may not have an established credit history. The Federal Housing Administration (FHA) has long permitted mortgage lenders to establish a borrower s credit history through nontraditional means, including the compilation of performance on rental payments; utility bills; telephone and cellular phone services; cable television service; payments to local stores, etc. This practice is appropriate when the borrower has insufficient trade lines with Equifax, Experian, or TransUnion and a credit bureau score cannot be derived.

Mortgage lenders also may use nontraditional credit verification to augment thin-file credit reports where a credit score was generated but based on only a few trade lines.

However, nontraditional credit reports may not be used to enhance any poor credit history on a traditional credit report.