Can two people qualify for a mortgage if only one person has a credit score?

By Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience

Edited by Michael Jensen, Mortgage and Finance Guru

Updated December 11, 2022

The short answer to your question is yes -- two people can qualify for a mortgage even if only one applicant has a credit score. In this scenario, however, the lender applies additional qualification requirements you must satisfy to be approved for the loan.

First, the property being financed must be a single-unit residence occupied by both borrowers. This means you must move into the property within 60 days of your loan closing. This requirement also means you cannot take out a mortgage on a multifamily property such as a duplex or on an investment property or second home.

Second, the loan amount cannot exceed the general conforming loan limit, which is $726,200. The property purchase price, or property value if you are refinancing, can be higher than the loan limit but not your mortgage amount.

Please note that cash-out refinances are not permitted if only one borrower has a credit score. This means the applicants can personally receive 2% of the mortgage amount or $2,000, whichever is lower.

Additionally, if the borrower without the credit score is contributing more than 50% of the income used to qualify for the mortgage, the lender is required to establish a nontraditional credit history for that borrower using at least two credit sources.

For example, if the combined monthly gross income for both applicants is $5,000 and the applicant with no credit score earns $3,000 per month (60% of total income), the lender must develop a non-traditional credit profile for that applicant.

Examples of nontraditional credit sources include your on-time rental payment history for the past twelve months and on-time payments for recurring monthly expenses such as utility, mobile phone or cable bills. In some cases, the credit bureaus can provide the lender a non-traditional credit report or you can provide documents directly from the creditor -- the company you pay the bill to -- that demonstrate your payment history.

The lender may also be able to review an asset verification report provided by a third party that analyzes the applicant's bank and investment account statements for the past twelve months to determine their monthly cash flow and account balances.  An asset verification report that shows a positive financial profile can be used to satisfy the nontraditional credit history requirements for that borrower.       

If the borrower without a credit score is contributing less than 50% of the income used to qualify for the loan, the lender is not required to establish a nontraditional credit history for that borrower.

Another point to keep in mind is that depending on the applicant’s credit score, down payment, debt-to-income ratio and other factors, you may be required to hold reserves at closing. In this case, you need to have sufficient funds in your bank account to meet the lender’s reserve requirement after paying your down payment and closing costs.

We recommend that you contact multiple lenders in the table below to understand how they would handle your unique situation. We advise you to contact at least five lenders as qualification requirements vary and not all lenders are familiar with the guidelines outlined above. Shopping for a mortgage on FREEandCLEAR is free, requires no personal info and does not affect your credit.

It’s also important to know that the applicant with the credit score must meet the lender’s minimum score requirement, which is typically 620 for a conventional mortgage and 500 or 580 for an FHA loan, depending on your down payment.

Finally, we should highlight that the above guidelines only apply when one of two borrowers applying for a mortgage does not have a credit score, typically due to a limited traditional credit history.

Different mortgage lending guidelines apply if both applicants have credit scores but one applicant’s score is significantly lower than the other’s. In that case, lenders average the borrowers’ middle credit scores to determine the score used for their application.

Sources

"B3-5.4-01, Eligibility Requirements for Loans with Nontraditional Credit, DU Loan Casefiles: At Least One Borrower Has No Credit Score and Another Borrower Has a Credit Score."  Selling Guide: Fannie Mae Single Family.  Fannie Mae, December 19 2017.  Web.

"B3-5.4-03, Documentation and Assessment of a Nontraditional Credit History."  Selling Guide: Fannie Mae Single Family.  Fannie Mae, August 30 2016.  Web.

"Enhancements to Support Loans Where No Borrower has Traditional Credit."  Desktop Underwriter/Desktop Originator Release Notes, DU Version 11.0 December Update.  Fannie Mae, December 5 2022.  Web.