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Fannie Mae and Freddie Mac (conventional) and FHA have guidelines determining the minimum number of trade lines and the length of the credit history a borrower should have. Trade lines are the credit history reported by the credit bureaus for revolving and installment debt on a credit report.
Conventional guidelines typically require a minimum of 3 trade lines with a minimum of 1 being open. 1 trade line should have at least a 24 month history and the other 2 should at least a 12 month history.
FHA guidelines typically require a minimum of 3 trade lines and they may be open or closed but each should have at least a 12 month history.
When the above guidelines cannot be met both conventional and FHA allow for nontraditional credit history. The following are the types of credit references that may be used for establishing a nontraditional credit history. The credit references are classified into 2 groups:
1) Rental housing payments verified with the most recent 12 months of cancelled checks
2) Utility companies including gas, electricity, water, land line telephone service and cable television
1) Insurance payments for medical or auto
2) Payments to ... more
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