How to Buy a House When Your Spouse Has No Credit

Lindsay Konsko
By Lindsay Konsko 
Updated

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You and your spouse have saved for a down payment, searched the MLS and finally settled on your dream home. But if your spouse has no credit, you may be in a world of disappointment when you can’t get approved for a mortgage.

Or you may find a lender that is willing to take the gamble on the two of you, but only in exchange for an astronomical mortgage rate. Here are some of your best options if your partner’s credit is getting in the way of your home-buying goals.

Wait it out for better credit

If you aren’t in a hurry, you may want to put home buying plans on hold and give your spouse some time to build credit. He or she should look into secured credit cards if he or she is unable to qualify for a conventional card. During this time, make sure your spouse pays every bill on time and carries a low balance on the first-time credit card. It’s also smart to have your partner check his or her credit report to ensure there are no errors that could be contributing to credit problems.

These responsible behaviors should greatly improve your spouse’s credit over the course of a year. Once your spouse has established a solid credit report, you can apply for a mortgage together with much better chances of getting approved.

Apply for the mortgage in your name

Even if your credit is stellar, lenders pay a lot of attention to a low credit score on an application. Experts say that credit scores below 600 make it hard to be approved by mortgage lenders, so if your spouse’s credit score is lower than that, you may be better off applying for the loan on your own.

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He or she can still be listed as one of the homeowners on the title to the house, and you can refinance the loan in both of your names in the future. The main risk with this strategy is you will be able to show only one income on the application, so if your income is not very high, you may qualify for only a smaller or less expensive home than you want.

Try a larger down payment

You can still try to qualify for a mortgage together. While typical down payments range from 3.5% to 20% of the home’s purchase price, you may be able to persuade a lender to approve you and your spouse for a mortgage if you put a much larger percent down --- perhaps as much as 50%. This gives the lender confidence that it won’t be completely down and out if you run into trouble paying your mortgage.

Be aware of community property states

If you live in one of the nine community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin) the lender has the right to look at your spouse’s credit history and debts even if you don’t put him or her on the loan application.

If your spouse has debt in collections or a past bankruptcy, this could cause you to be denied even if your name is the only one on the application. Not all lenders look at this, but if you apply for a Federal Housing Administration loan, you can expect your spouse’s debt to be considered regardless of whose name goes on the paperwork.

Mortgage loans from our partners

Rocket Mortgage - PURCHASE logo
Check Rate

on Rocket Mortgage

Rocket Mortgage

4.0

NerdWallet rating 
Rocket Mortgage - PURCHASE logo

4.0

NerdWallet rating 
Min. credit score 
620

Min. down payment 
1%

Check Rate

on Rocket Mortgage

NBKC - PURCHASE logo
Check Rate

on NBKC

NBKC

4.5

NerdWallet rating 
NBKC - PURCHASE logo

4.5

NerdWallet rating 
Min. credit score 
620

Min. down payment 
3%

Check Rate

on NBKC

Guaranteed Rate - PURCHASE logo
Check Rate

on Guaranteed Rate

Guaranteed Rate

5.0

NerdWallet rating 
Guaranteed Rate - PURCHASE logo

5.0

NerdWallet rating 
Min. credit score 
620

Min. down payment 
3%

Check Rate

on Guaranteed Rate

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