Episode•October 10, 2024•19 min

Steve Stewart’s Guide to Mortgages Without Traditional Credit Scores | Ep. 344

In this episode of Money Talk With Tiff, Tiffany Grant welcomes her mentor and friend, Steve Stewart. Steve delves into the intricacies of qualifying for a traditional mortgage without relying on a traditional credit score. Listen in as Steve shares his personal journey of securing a mortgage with a zero credit score and the tools and strategies he used to achieve this. From leveraging utility payments to using tech solutions like eCredible and Experian Boost, Steve breaks down alternative pathways to building creditworthiness and securing a mortgage. Check out the full show notes: https://moneytalkwitht.com/podcast-show-notes/mortgage-without-a-credit-score/ About Our Guest Steve Stewart is the Podcast Editor for some of the biggest indie personal finance podcasts like the Stacking Benjamins Show, Afford Anything, and the MilMo Show. He also created the Podcast Editors Club, now with over 9,000 members, and co-founded the Podcast Editor Academy - which helps individuals build their own podcast services business. If you’re looking for help with your podcast, Steve is there to support! Key Points Discussed What constitutes a traditional mortgage and the role of a FICO score. Steve’s personal experience of maintaining zero consumer debt since 2007. Importance of payment history and amounts owed as components of a FICO score. Introduction to tools like eCredable and Experian Boost to report alternative payment histories. The benefits and security of using debit cards for travel and daily expenses. Practical advice on focusing less on traditional credit scores and more on financial responsibility. Resources Mentioned eCredable: eCredable Website (affiliate link) Experian Boost: Experian Boost Website Follow Steve Stewart Website: SteveStewart.Me Social Media: @SteveStewartMe on all platforms Follow Tiffany Grant Website: Money Talk With Tiff Social Media: @MoneyTalkWithT on all platforms What's Next? Explore the options available through eCredable and Experian Boost to build a non-traditional credit score. Review your current debts and consider strategies to pay them off promptly. Evaluate the benefits of using debit cards over credit cards for your personal spending habits. Share this episode with someone who might benefit from understanding alternative ways to build creditworthiness. Support this Podcast Thanks for joining us on this insightful episode with Steve Stewart. Be sure to subscribe, rate, and review Money Talk With Tiff on your favorite podcast platform! If you have any questions or topics you'd like us to cover, drop us a message on social media. This podcast uses the following third-party services for analysis: Podcorn - https://podcorn.com/privacy OP3 - https://op3.dev/privacy

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Key Takeaways

1
Traditional FICO scores rely heavily on debt history, but alternative payment reporting can build creditworthiness without consumer debt.
FICO score breakdown: 35% payment history, 30% amounts owed, 15% length of history, 10% credit mix, 10% new credit.
Steve maintained zero consumer debt since 2007 and zero credit score from 2017-2024 yet qualified for a traditional mortgage.
Tools like eCredable and Experian Boost report utility, cell phone, and insurance payments to credit bureaus.
2
Paying bills and debts on time is the core strategy for proving creditworthiness.
Steve's seven-word advice: 'Pay your debts and bills on time.'
eCredable reports payments to TransUnion; Experian Boost reports to Experian via bank account connection.
Focus on financial responsibility over credit score manipulation.
3
Debit cards offer comparable security to credit cards for travel and daily expenses.
Zero liability protection applies to debit cards and has for over a decade.
Steve and his wife use debit cards for flights, car rentals, and hotels without issues.
Banks often proactively detect and resolve fraudulent debit transactions.
4
Self-employed individuals can qualify for traditional mortgages without traditional credit products.
Steve is self-employed since 2016 and the sole income earner.
Alternative credit data allowed qualification for a large mortgage with ~20% down payment.
Income and net worth matter more to lenders than FICO score alone.

Intro

Tiffany Grant interviews Steve Stewart about qualifying for a traditional mortgage without relying on a conventional FICO credit score.
Steve Stewart is the Podcast Editor for major personal finance shows including Stacking Benjamins, Afford Anything, and the MilMo Show. He created the Podcast Editors Club (9,000+ members) and co-founded the Podcast Editor Academy.

Website eCredable (affiliate)Social Media

– What Is a Traditional Mortgage?

Steve explains that traditional mortgages in the U.S. primarily rely on FICO scores, which are built from debt products like credit cards, car loans, and mortgages.

It's the most efficient way for banks to do it because they can say, okay, we can see you've had debts and you've paid them off.
– Steve Stewart

– Steve's Zero-Debt Journey Since 2007

Steve cut up his credit cards in 2007, paid off his mortgage in 2015, and had a zero credit score by 2017 because there was no debt activity for FICO to measure.

By 2017, I had zero credit score because there was nothing for FICO to measure me against.
– Steve Stewart

– Using eCredable and Experian Boost

Steve used eCredable to report utility and insurance payments to TransUnion and Experian Boost (free) to report recurring bills to Experian, building non-traditional credit history.

Pay your debts and bills on time. Boom. That's it.
– Steve Stewart

These tools helped Steve achieve a 373 TransUnion score and ~750 Experian score without traditional debt.

– Debit Cards for Travel and Security

Steve and his wife travel using only debit cards for flights, hotels, and car rentals. He notes that zero-liability protection applies to debit cards and banks often proactively flag fraud.

The technology is there. We're in a world of Bitcoin, okay? Now, Bitcoin is a lot scarier than a debit card right now to a lot of people.
– Steve Stewart

– Focus on Responsibility, Not the Score

Steve emphasizes that FICO scores measure debt behavior, not income or net worth. Paying bills on time and avoiding unnecessary debt is sufficient for major financial milestones like mortgages.

Resources

Topics

Credit ScoresMortgagesAlternative CreditDebt-Free LivingPersonal FinanceSelf-EmploymentDebit CardsFinancial Responsibility FICO Score Utility Bill Reporting