A Zero Credit Score?!

I have to admit that, though we have owned a house in the past, the task of getting a loan, searching for a house, deciding on a house and then closing on a house all sounds like a really daunting, overwhelming task. This process would be intimidating in of itself, but we have one other complication to add to the mix: a zero credit score.

“What?” you may be asking. “How does anyone have a zero credit score?”

The answer is simple; we currently have no debt and no lines of credit. We did purchase our first home with a mortgage. But since we sold that house four years ago, we now have no lines of credit and therefore a zero credit score.

We have scrimped, saved, trimmed fat and worked numerous jobs over our last 15 years of marriage in order to avoid debt besides a mortgage- no student loans, no car loans, no credit cards. For us, debt is not an option.

Now, I have to admit that I have not always been on the debt free plan. My parents taught me to pay cash for purchases. However, I was also taught that upon graduating high school, I should start to build my credit. So during the first week of school my freshman year of college, I signed up for my first credit card. (Free 2 liter of Pepsi anyone?) My plan was to use the credit card for emergencies and when I did use it, to pay the entire balance off each month.

The problem occurred when I became a resident advisor in my dorm my junior year of college. I wanted to host a program in the dorm to welcome all of the new residents, and I wanted to buy some pizzas to share. Of course, I could be reimbursed for the cost of the pizza, but I had to pay the money up front first. So I used my credit card. This became a fairly regular habit during my time as a resident advisor, but the problem was that I was not disciplined enough to take the reimbursement checks, deposit them and use the money to pay off the credit balance. I got lazy, and my bookkeeping was nonexistent. Pretty soon, I was carrying a couple hundred dollar balance and only paying the minimum payment each month.

The crazy thing was that in the process of being undisciplined in my finances, I was actually building an amazing credit score. I was making regular payments on time. Never mind that I didn’t have the money to pay off the balance or that I had no savings. I was still considered a good borrower.

After I graduated college, I finally decided to stop the insanity of the minimum monthly payments and pay the whole thing off. After all, Andy and I were to be married nine months later, and I didn’t want to bring any debt into our marriage. I was able to pay it off in a few months.

When Andy and I purchased our first house three years later, I still had that great credit score, and I still had that open line of credit. It made our mortgage approval process easy, but Andy and I both began to question the credit game. A year or so later, we both decided to close our credit card accounts and to quit the senseless credit score game for good.

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Andy and Ginny

We are a married couple living in San Antonio, Texas who are delving into the adventure of buying a house with a zero credit score and trying to help other people do the same.

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