After a bankruptcy many years ago I swore off credit and have been happily plugging right along living within my means. Recently however, due to the economy going to hell in a hand basket I found myself in need of refinancing on the one and only bill I have in the world. After pulling my credit I was informed that I have nothing to report and therefore no credit. What now? the last time I felt this way I had acne!! I checked it in June and it was 640 average between the three agencies. I guess the only thing on my record disappeared between June and Sept. Now they say - No qualifying accounts! Who will give me credit. I own a home free and clear worth $500k and another income property worth $200k and everything in my life ie. cars boat etc are all paid for. I am retired and bring in about 40k per year. Any ideas? Will a credit card company open an account backed up by real estate? Is a secured card treated any differently by the rating agencies than a regular account?
Sorry to hear about your situation. Unfortunately, it's just not a good thing to be a phantom in the credit scoring world these days. What exactly are you trying to refinance? Is it for a rather modest or large amount? It'll be difficult to qualify for anything without a decent credit score, but it sounds like you have substantial equity in several properties. So, you could theoretically obtain a HELOC using one of the properties as collateral, which could then be used to pay off whatever loan you're trying to refinance. Then you can set your own payment terms on the HELOC to pay down the debt as fast a possible. Of course, that depends on how much money you're looking to borrow. And without a good credit score, you'll need to find a lender that's willing to look at your entire financial picture and make a more holistic underwriting decision. Do you have any relationships with a local credit union? You'll have better luck with them than any regional or national bank in the current lending market. Also, you won't find any credit cards secured by real estate (they want cash as collateral); however, secured cards can be an effective, yet slow, way to rebuild your credit profile. Those that report to all 3 of the major credit bureaus are what you want to get. Check out our Secured Credit Cards section to read reviews and compare different reputable cards.
Home Equity Line of Credit. Since you own a home free and clear worth $500K, you have available equity to borrow against, and then your interest payments will be tax deductible.
