What is a thin credit file?

Have you tried but been unable to pull your credit report or see your credit score? This might be because of a thin credit file. A thin credit file is a credit report that does not have enough meaningful credit items to generate a score. Don’t worry though – this is something you can fix!

Why do I have a thin credit file?

Over 62 million Americans have a thin credit file, so you’re not alone. There are a few reasons why you may have a thin credit file.  Check and see if you fit into any of these categories:

• You’ve never had credit – If you’ve never had any lines of credit, like a credit card, student loan, or mortgage, the credit bureaus may not be able to generate a score for you.
• You’re new to credit – It takes time to build credit history and receive a credit score, so if you’ve just opened a new credit card or taken out a loan, it may take a little longer to generate a score.  

These next two reasons are less likely but still possible. 

• The credit bureaus believe you are deceased – While it sounds strange, credit bureaus can mistakenly conclude you’ve passed away. It is a rare occurrence, but you’ll want to contact the credit bureaus if it happens.
• You have a split file – Sometimes the bureaus have split your information across more than one file.  While this is also a rare occurrence, a split file typically happens because information on your report or your personal information, like your name and address, has changed frequently

How can I fix a thin credit file?

Now that you’ve learned why you may have a thin file, it’s time to kick off the credit building process that will generate a report and score. This is actually an exciting situation because it means you have a clean slate to build a new, positive credit history!  There are several good ways to get started:

• Secured cards – For this special type of credit card, you’ll deposit funds into a bank account which is held as security for the money you borrow. In most cases, your credit line will equal the amount of money you have deposited, so if you have a $500 security deposit, you’ll have a $500 credit line. Using this card gives you a chance to show that you’ll pay bills as agreed.
• Student cards – If you’re in college, you’ll find that there are credit cards geared toward college students. These cards are unsecured and may offer rewards for good grades.
• Retail store cards – Many retailers have special credit cards for use in their own stores, and they typically have more lenient approval requirements than other cards. This type of card may have a low credit limit and a high-interest rate, but it gives you a chance to establish a good credit history. 

Friendly Tip – whatever credit card you choose, make sure you understand the terms you’re agreeing to, such as interest rates and annual fees. 

Another great way to establish credit is through a credit-building app. Apps like Level Credit or Stellarfi help you build positive credit history by reporting to the credit bureaus your on-time payments for rent, utilities, or subscriptions.  You are already making these payments, so why not get credit for them?

Taking Care of Your Credit

Always be sure to make your credit card and bill payments on time. Pay more than the minimum payment whenever you can and avoid borrowing more than you can pay back. Making a late payment will be very damaging to your credit score. 

As you begin to establish credit, keep an eye on your credit report to make sure there are no errors or signs of credit fraud. If you find anything that looks like a mistake, contact Dovly, an automated credit engine, to help you dispute them with the credit bureaus. Give it a try risk-free with our free membership tier.