Thin File Credit Scores – Episode #80

A thin file is a credit report with so few tradelines on it that it won’t produce a credit score.  It usually occurs in young people who haven’t established credit and groups of people who culturally avoid credit and instead are very cash focused. It also impacts expats from other countries who have no US based credit.

Sadly, a “no-score” is often treated as a bad credit score.  Since no risk can be assessed, companies may assume the worst and deny credit when it is really needed.

An estimated 20 million adults in the U.S. are classified as “underserved”.  The industry used to use terms like “underbanked” or “unbanked” and probably decided those terms were not as marketing friendly.   Sort of like “bailout” versus “rescue plan”.

So how do you shake your thin file status?  Here’s some quick tips:

1. Get a secured credit card. It’s a great way to start building credit
2. After a bit, get an unsecured credit card.
3. Get a personal loan from your bank for $500.  This is an installment loan and that can help thicken your credit file
4. Consider a car loan, even if you can afford to pay for it in cash.

Thin file users look like Expats who come to the US with no US credit history.  Check out my episode on expats and credit scores.

Similar Posts:

• Thin File Credit Scores – Episode #80
• Thin File or No-Hit Credit – Episode #96
• Payday Loans and Your Credit Scores – Episode #30
• Store Credit Cards – Save Now, Pay More Later – Episode #91
• Personal Loans and Credit Scores – Episode #70
• Expats and Credit Scores – Episode #69