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?

1. Explore the options available through eCredable and Experian Boost to build a non-traditional credit score.
2. Review your current debts and consider strategies to pay them off promptly.
3. Evaluate the benefits of using debit cards over credit cards for your personal spending habits.
4. 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.

You know what it is. That's right. It's time to talk money with your money

nerd and financial coach. Now, tighten those purse strings

and open those ears. It's the money talk with Tiff

podcast.

Hey, everyone. I am so excited because I

have one of my mentors and someone, a dear

friend, Steve Stewart, on the line, and he is here to talk

to us about how to qualify for a traditional mortgage

without the traditional credit score underwriting. So, hey, Steve, how are you

today? Hey, Tiff, thanks for having me here. It's a pleasure.

Yes. And this topic, like, I feel like so

many people would get so much use out of it, so let's just dive right

in. So, first and foremost, when we're talking about a traditional

mortgage, what does that even mean? Traditional mortgage

in the american states that we need to

clarify, as far as I understand, is usually

based on a couple of measurements, but the most important one is

the most efficient one. It's a traditional credit score. People may hear

about the FICO score, and that is, it's made

up of five different measurement tools, but a lot of

it is based on debt and having debt products that you

use, like credit cards or if you've got car loans, any type of

payment history on debt products. And it's the most

efficient way for banks to do it because they can say, oh, okay, we can

see you've had debts and you've paid them off. So, okay, you can get this

mortgage, which is a debt, and probably pay it off. So that's where

a traditional mortgage comes into play. Now, there's other types of mortgages,

too people can qualify for, such as

FHA loans and things like that. And there's different qualifications or different

not limitations, but less restriction on those as well. But we're

talking here about a traditional FICO score

type of mortgage that my wife and I qualified for.

Even though I'm the only one that's working, I'm the only one bringing an income

for the past almost three years now self

employed, which makes it even more difficult for traditional mortgages

and not making more than six figures, actually not even making

six figures a year yet. So, yeah, we need

all this juice. But it's funny that you mention

that you need debt to have a credit, because I thought that was

so weird. Like, when I first started on my credit journey, I was like,

so I have to have debt in order to get credit?

Yep. Yep, that's the case. In fact, the five

pieces, the FICO score, the biggest one is payment history.

35%. The payment history is usually, and we'll talk a little bit

about how this is changing nowadays. But for the past, you know, 40

years, I think it's been 35% of that is payment history. And it's

usually on credit cards, car loans, student loans,

even medical debt, and of course, mortgages. But then the next biggest one

is 30%, which is amount owed. Well, if you're like me

and you have no debt, at least up until we qualified for this

mortgage, you know, I didn't have any debt. In fact, to give people a little

background, I cut up my credit cards in

2007. We had

no consumer debt since 2008. No, 2007. So

that was a long period of time where I had no consumer debt. And the

mortgage that we did have at the time, we paid that off in December

2015, and by 2017, I had zero

credit score because there was nothing for FICO to

measure me against. I had no payment history on debts. I had no

amounts owed on debts because I had no debts. I wasn't taking

out any new credit, which is 10% of the FICO score.

10% of another 10% of the FICO score is credit mix.

So you've got your credit card type loans, you've got

your car loans, you got your mortgages or different types of loans. I didn't

have those. And then the length of credit history is the other 15%

of that total FICO score measurement. And of course, I didn't have

one anymore because we had paid everything off and the mortgage was even gone.

So we're talking from 2017 to

this year is when you closed, right? Yes. 24.

Yeah. So, 2017 to 20240, credit

score, nothing on your credit. So how did you do this?

Yeah, normally people would say, oh, you'd have to do something like manual

underwriting, which is a lengthy and

expensive process for a bank, because now they've got to look into things that are

more than just, you know, this three digit number that everybody's

praising and everybody's working towards. So what I had

done was kind of circumvent the system. And what's amazing is that

there's tools. There's. There's actually one tool I had been using for a few years,

and it's been around for a decade, but nobody hears about it because

everybody's talking about the traditional FICO score. And then there's another

product out in the market now that people probably have heard of, but maybe they

just don't understand what it is. So let me tell you what those two products

are. One of them is called ecredible.

Ecredible is a third party

system that you can sign up for and you

basically let them report your

utility bills, your insurance payments, you

know, anything you want. They can then track and report to

the credit card, to the credit companies, the three

big, well, there's three big companies. We should start

there. So Fico is kind of the big one that everybody hears about. But

there's three major companies out there that provide credit

scores besides FicO. Transunion, Experian

in Equifax. Well, this company credible will

report utility bills, you know, your cell phone bill, if you're

making these payments on a regular basis, and they can see that they're going to

report those to Transunion, which is fantastic because then you're

saying, hey, I've got a history, I've got a length of

payment history, which again, is the biggest component of a traditional

credit score. And I paid off every month. So

that balance is paid every month and it's going to raise

your, your traditional credit score. Then

there's a product from Experian called Experian Boost,

which is free. And it does a very similar thing.

It does it in a different way. It basically just crawls your,

your bank account. So you get to tie your bank account to it,

and it will then report to

experian your things like cell phone bill,

Internet, cable, whatever, and that

increases your Experian credit score. So I had been

doing these things knowing that eventually we're going to move to this place

in paradise, which nobody knows about, and it's in the middle of

nowhere. It's wonderful. We're so happy here.

I love the pictures, by the way. Yeah.

I'll send you some. You can put in the show notes.

Leading up to this, I just simply had things like our cell phone

bill and our credit score or our,

what were the things? I'm trying to remember what they were very simple things, things

that everybody has. And they were being reported to these credit

agencies. So much so that I had a

score not based on traditional stuff, but based on

things like paying our cable bill and things like that.

Of 373 that would be reported

to Transunion, 373 is considered a good

credit score then for Experian with Experience boost,

my credit score according to Experian, again, based on no debt

products right now, even now. So now

we've had a mortgage for a few months. So that's, that's obviously helping there. But

my credit score in there has been around 750

before and after, which is considered a good credit score. So I'm going to give

everybody seven words that

other people will pay thousands of dollars for a how to build your credit

score course, I'm going to give you seven words for free that will tell you

exactly what I did here. Pay your debts and bills on time.

Boom, there you have it. That's it. If you do

that. Yeah, if you do that. And then you can use these tools like I'm

talking about. But you're already building up your, your history of being able

to make payments. If you pay your bills and debts on time,

you're going to be eligible to be proven as

creditworthiness, even for a mortgage. So we don't borrow money

for anything except for this one time where we, we now have

a mortgage. And this mortgage wasn't just a little bit of money because we didn't

sell the house that we were in and take the equity to pay down this,

this mortgage until about six weeks after

we moved in. So I had to qualify for this

ridiculously huge honking mortgage. That was scary to me.

And now get it to a manageable monthly payment.

But even then, I want to kill that off. But it didn't take,

following the traditional advice to get that huge honking mortgage,

which I think is just amazing. I absolutely

love that because I'm very debt adverse as well.

And that's one thing. Even if people listen to, for

instance, at Dave Ramsey or whatever, he's like, yeah, you have a

zero credit score. But then people are like, okay, so how do I get stuff?

And so to know that there's people out here that's actually

doing this and using these different tools and resources

to kind of circumvent that debt piece, I think is

phenomenal. So ecredible was one that you mentioned.

And then Experian boost. So Experian boost is for Experian.

And then ecredible, they report to Transunion. Is there anybody for

equifax? There are some out there. And, tiff, you actually

queued me in on one. I forget what it was called, but you're basically paying

like five months. I think it's $5 a month. And I think they

report. I don't know for sure, but you know what?

I don't care. And that's kind of the, that's kind of the point

here is everybody talks about how important it is to have a credit score, that

you need a credit score. I didn't have a credit score. We qualified for

a huge honking mortgage by doing these simple things of paying your bills and debts

on time. And I didn't have any debts. And when you don't have debts, you

can do something called save money, which is where you

can get a nice down payment. Now, we did have a good down payment, but

it wasn't 50% of the mortgage or anything like that. It was

maybe around 20%, which is what people will recommend, ten to

20%. So you can do stuff

like this without having to do all this

manipulation over here of trying to keep your credit utilization and your

credit cards just at the right rate. Use enough, but don't use too much

and take out the right types of credit. Have a mix of

credit. You don't have to mess with any of that. Just pay your bills and

debts on time and eventually pay off your debts. Don't worry about your credit

score. And then if you are going to borrow money again in the future,

then you can do something like this. Exactly.

Exactly. I see posts all the time and I get questions all

the time. And people listen to the episodes about credit

scores and stuff and blog posts about credit scores all the time because

people are so hyper focused on that credit

score, thinking that this is the ticket, this is it,

this is what I need to do. And these are the traditional ways to do

it. But here's a whole other option to play the

game a whole different way. And I love it. Yep.

Yep. And if you notice, when I go through the FICO score, let me go

through them again. 35% is payment history, 30% is amounts

owed, 15% is the length of your credit debt

history. 10% is the mix of the types of debts

that you have, and 10% is new credit. How much new credit you

use, none of that has to do with how much money you have. It has

nothing to do with net worth, has nothing to do with your income, has

nothing to do with any of that stuff. Now, a bank for a mortgage is

going to look at your income. Obviously, I was self, I am self employed.

I've been self employed since 2016. My wife doesn't work a

traditional job. She does some freelancing work here and there, but she doesn't

have a big enough income to make a big

dent into how we qualified for this mortgage. Yet

we were able to do it because of all this stuff. So it's not income,

it's not net worth. The FICO score is always based on

debt, or you circumvent it with these other ways to show

payment history, which shows your credit worthiness. That's the one thing that's been

changing over the past five to ten years. Nice and so what I

hear you saying, Steve, is to be a good

steward over the bills and things that you already have,

and then you can use that with maybe some technology

to improve your credit score without taking on debt.

Bingo. I love it. I love it so much. I'm like, where

were you when I was like, go first started on this process?

But that's why we're here today. So that way we can share with other

people who may be going through, because honestly, y'all, like,

I love what Steve is saying about the credit score. You know, we get too

hyper focused on it. And really, at the end of the day, it doesn't

matter. It really doesn't matter. Once

you qualify, like, once you get a house or car, whatever it is you're

trying to qualify for, then it just becomes a second thought. Like, I don't even

check my credit score like that anymore. Yeah, don't spend your

time looking at it. Don't spend your time working on it. And here's something

that a lot of your listeners are probably sitting here going, tiff, what about this?

What about this? What is this? How do you go and travel without

a credit card? Because I don't have a credit card. How have my wife and

I traveled to fantastic destinations? We've flown, we've rented

cars, hotels, all this stuff without a credit card. We use a debit card.

And people say, oh, debit card's not safe. Come on. 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.

The technology there to, well, first of all, the

zero liability protection that everybody talks about with credit scores or credit

cards. It's also applicable to debit cards, and

it has been for over a decade. I can prove it. I've got the links

to the websites that show that protection. Every

time that we have had a debit card compromise,

which is a. It's been four times between my business debit cards

and are personal. All but

one time the bank has contacted us saying, hey, there's this weird transaction.

Somebody tried to rent a room at the Bellagio in Vegas. Was that you?

I'm like, no, I'm here. And I was in Missouri at the time. I was

like, nope, that's not me. They canceled it. They refunded the money.

I got a new card in a couple days. No big deal.

I'll tell you one thing, though. I've got a relative who had their credit

card compromised, and she called the

credit card company and said, hey, there's this fraudulent transaction

on my account. You need to take care of it. They didn't stand by their

zero liability policy. They said, oh, you need to contact whatever this false

charge is and deal with them. So,

hmm. My bank, with my debit card wants to work

with me. The credit card company that they, that she

had didn't want to work with her on this. Again,

I'm going to go back to all the stuff that we hear about

credit or, you know, dangers of debit cards.

I've challenged those findings and I find that

they're not always true and there's ways around

it, and it's not a lot of work to find ways around it.

Exactly. And just like you, Steve, like, when I travel, I use my debit card.

Like I use my state employees credit union,

because also, for me, I'm like, if

I don't have it, I don't really want to go personally.

So I'm like, I would rather not put stuff

on credit cards personally. And I get that all the time. People

are like, but what about points or what about the security of

the credit card and things like that? I'm like, I haven't had an issue yet.

And with the whole points workaround thing,

I just travel with the same airlines and stuff, and so I just get

the points that way and then use them. So I'm like, there's

ways around these things. I think with the things that we're talking about today,

credit card companies made this stuff up so they could get more

money. Yeah. And you know what? They were

smart to do. So it's just a game I'm not going to play.

Exactly. And we can bow out gracefully. So, Steve, thank you

so much for dropping all of these gems. Now, if

people wanted to learn more about this or more about you, how

could they find you? Gosh. Well, to learn more about this, I

mean, I used to have a podcast where I talked about these things, but it's

been over a decade since I retired that show. So the

information may not be current, but it was, it was still

applicable today. But that, that was the money plan. So's podcast,

although I wouldn't recommend going back and list those. But if you do want to

connect with me, go on the socials, you'll find me. Everything I do is pretty

much under the, the label Steve Stewart me

because it's Stevestewart me, and I couldn't get the.com, so I just made

everything Steve Stewart me. That's my socials. That's my website. That's where you'll

find me, just like Tiff did. Perfect. Perfect. Thank you so much, Steve.

And I'll make sure I have all of that information in the show notes along

with some links to these companies, so that way you can get started on this

journey as well. Thank you so much, Steve, again. And when y'all

look up Steve, you'll realize that he is the guru

of podcasting. He's being very humble, but

he's the guru of podcasting. So definitely look him

up, definitely follow him. And thank you so much for sharing how you did

this in all these gems so it can help somebody else. Well, thanks again, Tiff.

You make me blush, so keep paying attention at interest. Cool.

Sounds good. Bye.

Thank you for listening, joining and being a part of the Money Talk with TIFF

podcast this week. You can check Tiff out every Thursday for a

new money talk podcast. But if you just cant wait until next week,

you can listen to previous podcast

episodes@moneytalkwitht.com or

follow TIFF on all social media platforms at

moneytalkwitht. Until next time, spend wise

by spending less than you make a word to the money wise is

always sufficient.