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A thin credit file is a credit report that has few active credit accounts on it. Having a thin file can make qualifying for credit and getting the best rates and terms more difficult. But it doesn't take much to go from a thin to a thick file.
What Is a Thin Credit File?
A thin credit file is a credit file that doesn't have many active tradelines—credit accounts, such as loans or credit cards.
Lenders have varying definitions for what qualifies as a thin versus thick file. Some might say you have a thin file if you only have one or two tradelines, while others consider anyone with fewer than five accounts as a thin-file consumer.
Sometimes, having a thin file is also used to refer to someone who doesn't have enough information in their credit report to generate a credit score.
- For most FICO Scores, you need to have an account that's at least six months old and have had activity on a credit account within the last six months to receive a credit score.
- For VantageScore® s®, you just need to have a credit account, collection account or bankruptcy in your credit file to be scored. There is no requirement for how long that account has been open or how recently you used it.
Alternatively, this might be called an unscoreable or no-hit credit file rather than a thin file.
As of 2022, about 28 million Americans had never had credit and didn't have a credit file. An additional 21 million had credit files, but their credit reports didn't have enough information to be scored by most FICO Scores.
Learn more >> The Difference Between VantageScore and FICO® Scores
Who Is Most Likely to Have a Thin Credit File?
People are most likely to have a thin credit file when they're new to credit or infrequently use credit. These people tend to be:
- Young adults, because they haven't had much time to open or use credit.
- New to the U.S., because their credit history in their home country won't be transferred to the credit bureaus' databases in the U.S.
- Older adults, who might not have open and active credit accounts anymore.
- From low-income areas, because they tend to have fewer creditworthy friends and family members who can cosign loans to help them access or establish credit. They also might rely on loans from friends or family members and alternative financial services that don't get reported to the credit bureaus, such as payday loans.
- Part of certain minority groups who may have had discriminatory or other negative experiences with credit and the financial system at large.
How a Thin File Affects You
Most lenders rely on the information from your credit reports and your credit scores to make lending decisions. If you have a thin credit file, you might have trouble qualifying for new accounts. And, even if you're approved, you might receive less favorable rates and terms.
A thin file could affect you when you try to open or apply for:
- Credit cards
- A mortgage, auto loan, personal loan or other type of installment loan
- In-store financing
- A rental home or apartment
- New utility, internet or phone services
- Various types of insurance
Having a thin file also might lead to a lower credit score. Credit scoring models separate consumers into different subgroups before assigning a score, such as groups for people who are new to credit, have thin files, have thick files and have major negative marks. If you're in the thin-file group, adding new accounts to thicken your file might help improve your credit scores.
How to Fix a Thin Credit File
Although having a thin file can make accessing some types of credit more difficult and expensive, there are ways to thicken your file. You just need to know where to look. Also, make sure the company will report the account to all three credit bureaus—Experian, TransUnion and Equifax. Otherwise, you won't be thickening all your credit reports.
Add Alternative Data to Your Credit Reports
One option could be to add payments that you're already making to your credit reports, such as monthly rent, phone, utility and streaming service bills.
Experian Boost®ø is a free feature that comes with your Experian account. You can link the bank account you make payments from and add eligible payments to your Experian credit report. Other companies may provide similar services for adding bills to your other credit reports, but they might not be free.
Apply for a Secured Credit Card
Secured cards generally don't require a good—or any—credit score. But you need to put down a refundable security deposit that often determines your credit line. Some of the best secured cards don't have an annual fee. You could use the card for a small monthly payment and then pay the bill in full each month to avoid interest charges while building credit.
Use a Debit-Credit Hybrid Card
Traditional debit cards don't appear in your credit reports or affect your credit scores. However, a few online-only banks and financial technology companies offer debit-like cards that can help you build credit. These might have low or no fees or interest rates. And it might be easier to manage a debit-like card than a traditional secured credit card if you're more familiar with using a debit or prepaid card.
Ask a Close Friend or Family Member to Add You as an Authorized User
When someone adds you as an authorized user on their credit card account, the credit card company may report the account's history and usage to the credit bureaus under your name. The new account can thicken your file and help your credit score even if you never use the card.
However, some issuers might not report their authorized-user accounts to the credit bureaus, so check with the issuer before requesting to be added. Additionally, beware that if the primary cardholder uses a large portion of their available credit, that might hurt rather than help your credit scores.
Join a Lending Circle
Lending circles are organized groups that gather and contribute a specific amount to a shared pool of money each month. Each member of the circle receives the funds, and the recipient changes each month until everyone has had a turn.
Informal lending circles don't affect your credit, but some nonprofit organizations create and manage lending circles that help members build their credit and savings at the same time. If there's a sponsoring organization in your area, you might be able to join a lending circle without paying any fees or interest.
Open a Credit-Builder Loan
You can also add an installment loan to your credit reports by taking out a credit-builder loan.
Unlike loans for making a purchase, the money you borrow gets locked in a separate account. Depending on the terms, you might unlock the funds once you pay off the loan. Or, the money in the account might be used to make the loan payments.
Small banks, credit unions and online lenders tend to offer credit-builder loans. You may need to pay fees and interest for the loan, so compare your options before applying.
Learn more >> How to Get a Credit-Builder Loan
Get a Creditworthy Cosigner
If you're trying to get a loan and struggling to qualify or receive a good rate, you could try asking a close friend or family member who has good credit to cosign. The cosigner might help you get the loan, but they're also taking on a legal obligation for the debt. The cosigner's credit could be damaged, and they could even be sued for the debt if you miss payments or default.
Monitor Your Credit as You Thicken Your File
Adding accounts to your credit report can help thicken your file, but building excellent credit also takes time. The most important factor in your credit score is your payment history: Try to always make your monthly payments on time. Only using a small portion of your credit cards' credit limits, paying the bills in full to avoid interest charges and only applying for credit when you need it can also help.
If you don't have any credit accounts in your name yet, you can create your credit report with Experian using Experian Go™. You can then use the Experian Boost feature to add eligible bill payments, and you'll receive other recommendations for building your credit.
Your Experian account also helps you track your progress with free credit monitoring, FICO® Score☉ tracking and real-time alerts when there are important changes in your credit file.
