My sister-in-law is a mortgage broker.  She said that the type of person you are describing might qualify for an in-house portfolio loan, but slim chance of a conventional loan.  

  As far as credit score and credit bureaus, if you don't have a credit card, auto loan, mortgage etc. you may have a very low score.

   Perhaps Caroline Gerardo or  John Meussner  or another Lender will opine.

Richie, your point is that responsible use of cash should equate to responsible use of credit.   I get your frustration.

But how else can an institution judge how well credit will be managed without seeing how credit has been managed?   

It's a tad paradoxical, but you have to use credit to get credit.

Hi Richie - I agree things should be updated, and when it's proven bills are paid on time month in and month out, approvals should be easier to come by

BUT

One thing to keep in mind is that creditors want to know the person they're lending to can manage credit.  There are few ways to know that outside of a credit history - alternative documentation is available, but unfortunately at least in our mortgage industry, they put scaling and volume desires ahead of actual commonsense underwriting on a borrower by borrower basis.

I agree Richie Alan Naggar but then again I have just about as high of a score as anyone can get for many decades now.

That being said I would also add that as a very young man, around the age of 20, I did have a bankruptcy. I personally felt it was my responsibility to rebuild my credit and no one else's.  I worked hard by following my bankers advice and with-in 5 or 6 years I was back on top (faster than the norm at the time). 

Many rule need to be updated to reflect modern business practices.  But then the rub. 

I had a client who didn't believe in credit cards.  Paid for everything in cash or check and had a zero credit score because of it.  Had to go to a credit union, who thankfully did the loan for him.  Was one they kept in house, I believe.  He was also a long time customer there.

But yes, the system is rigged.

Is it a rigged system? 

So much for "Cash is King!" 

Use of a little humor here folks 🤣

Best of luck, Richie. I am guessing you have run into someone who is questioning you payment record.

I had great credit from the use (and paying off) credit cards.  However at this point in time I don't use them anywhere that charges a higher price or fee for their use.

We could pay off our home, but were advised not to do so as it would eventually tank our score, so we have a very low payment just because it keeps our scores high.

That's right. If you want to borrow money, you need to show you've successfully done so before and paid it back. I once had a buyer who had no credit because she paid off all her debt after her divorce, didn't use a credit card, had a company car, and rented from an individual. She had a great income and plenty of money in the bank. We were able to help her but not at the level you would have thought.

Nobody said life was fair. Rules are made by humans that is a problem. Many rules lack common sense and are adopted for convenience.

I have never put much stock in credit reports, have seen too many poor risks with good credit, and I know several millionaires with poor credit scores, all about who is willing to play their game.

Oh, the system definitely needs to be updated, Richie Alan. The frustrating part to me is that if you live a life of 'no-debt,' you are punished with a lower credit rating.

To someone who is all about sensibility and 'common sense,' this makes NO sense!

Or procedures on the part of the borrower do, since they know they're going to be checked in a certain fashion (at least for a period up to the prequalification) . . . 

Are you really this smart?

Good luck with the updating.

It's all about Data and statistics.  cast no shadow and they can't predict risk.  It's not a human business anymore.  But for those stoic folks who can resist the lure of debt and stay out of the federal reserve banking system I commend you and envy you!  

Borrower can provide 12 or 24 months payments on time to utility, phone, mortgage, or some organized business. If there are four verified accounts that will provide credit for someone with no credit.

Someone with bad credit- tax liens/judgments/forbearance/late payments the four tradelines above do not overcome something larger and bad.  

MANY people with little or no credit but not bad can get conventional loans and other types of loans