What is a Thin Credit File?
What does it mean when a funding institution denies you for “weak credit” or “thin credit file”?
Basically it means, that you do not have enough credit history to rate, that you do not have enough loans, credit cards, mortgages, or car loans to generate a score high to get any funding.
So when a financial institution pulls your credit and there is not enough history, the credit bureaus send out an alert that you have a “thin file.” A “thin file” means you don’t have much of a track record with credit. Either you have only a few accounts, or your credit is relatively new, or both.
This is not a good thing and could hurt your chances of get any type of funding that you may be seeking.
So let’s go through the reason why you would have weak credit history so we can try to solve this problem.
It will not happen overnight, but with dedication and responsibility, one can really build on your credit report.
Now if you never had credit, meaning you do not have any lines of credit listed on your credit report, like credit cards, loans, ect then it’s impossible for bureaus such as Transunion, Experian, or Equifax to generate a score.
We all start of with a 0 score until we start building it up and hopefully one day reach the 850 mark!
How do you fix this?
Start building your credit. You can do this a number of ways. You can be a co-signer on a car loan or mortgage for someone who has amazing credit and good income that can help you establish credit.
You can become an authorized user on credit cards and try to establish credit with those cards on your file.
Another step you can do is to apply for a secured card, this can help in tremendous ways, but you do need to be away of annual fees or other terms.
Another way you can have thin credit file is the Credit Bureaus think you are deceased!
It sounds crazy, but it does happen. Credit bureaus can mistakenly believe you have passed away, usually happens to jr., suffixes, so when the credit agencies run your file it’s comes up as a “thin file,” because deceased people do not have credit scores.
How do you fix this?
This is a lengthy process but can be fixed if you put in enough time and effort.
You need to contact all three credit bureaus and notify them of this mistake, you can file disputes that include all your information including social and birthday , and have a written statement saying you are not deceased, you most likely will have to turn documents as well.
Still another way you can have thin credit file is your credit file is split meaning that you probably have had different names and moved around a lot so your file has been split in different sections.
Some reports will have different information on them as well as different scores so credit unions are getting multiple credit reports at once which leaves them to try generate their own score based on limited information causing an incorrect thin file error.
How do you fix this?
Well you will have to contact the credit bureaus directly letting them know your information is being reporting incorrectly and that you need all your reports to merge.
Of course, you need to check on your reports before you try to correct it, so you know exactly what needs to be on your credit report and which closed accounts are yours as well.
This usually occurs to those that have not yet started building up history. Or have not checked on their credit, or tried to take out loans, credit cards, or any types of funding in the past.
It’s always great to check up on your credit report periodically, as well to always build on your credit.
Make sure if you do want to have a high credit score that you remember the simple basics of credit building. Use a mixture of credit and always pay on time is the best way to build your credit.
Here is one example of a mortgage loan:
Coffee Real Estate Inc. is a California real estate broker located in Sacramento CA. California real estate license BRE # 01957904. Daniel Parisi licensed real estate broker BRE # 01923081. Mortgage broker National Mortgage Licensing System and Registry (NMLS) NMLS # 997987
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