An applicant has no credit score at all and pays rent of $1,450, utilities and insurance on time. Under a program requiring at least three eligible nontraditional payment references, how can the applicant establish credit history without inventing a score?
Correct Answer
C) Build a nontraditional history from 3 or more payment sources
C. Document the nontraditional references required by the program stated in the question. The question supplies a three-reference program condition; rent and eligible independently documented utility or insurance payments can provide nontraditional history. A missing score is not permission to invent one. Document payment histories and apply the actual program’s eligibility rules. Scope and exceptions: Three is not a universal minimum: Fannie Mae requirements vary by underwriting method and product. Utilities included in rent cannot count again as an independent reference. Source: B3-5.4-02, number and eligible types of references, 02/04/2026 — https://guide-selling.fanniemae.com/sel/b3-5.4-02/number-and-types-nontraditional-credit-references
Why This Is the Correct Answer
C. Document the nontraditional references required by the program stated in the question. The question supplies a three-reference program condition; rent and eligible independently documented utility or insurance payments can provide nontraditional history. A missing score is not permission to invent one. Document payment histories and apply the actual program’s eligibility rules. Scope and exceptions: Three is not a universal minimum: Fannie Mae requirements vary by underwriting method and product. Utilities included in rent cannot count again as an independent reference.
Why the Other Options Are Wrong
Option A: Assign a default score of 620 and underwrite from that figure
A lender cannot assign an invented 620 score.
Option B: Use the 1 rent payment record alone as the whole credit history
Rent alone does not meet the stipulated three-reference condition.
Option D: Decline the file, as an applicant with no score cannot be approved
No credit score does not universally preclude every mortgage program.
Exam Tip
No score means investigate the applicable nontraditional-credit pathway, not manufacture a score.
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