Having a thin file credit score may not bar you completely from getting a personal loan. Luckily, there are lenders out there that cater to low-credit and even no-credit borrowers, these loans are sometimes called bad credit loans. These include payday lenders, pawnshop lenders, car title lenders, and sometimes personal installment lenders. But your best bet is to start building your credit file so you can qualify for better loan options in the future.
Some people may not be familiar with what it means to have a “thin credit file.” Essentially, this means that you may not have enough credit and financial activity to be able to create a credit score. This is common with young people who haven’t ventured out on their own yet, people that are new to the country, or folks that haven’t used very much credit and typically only use cash. It basically means you don’t have a credit score.
Not having a credit score is similar to having poor credit. Lenders likely won’t be able to trust you with a loan or credit card since they don’t know whether or not you’re trustworthy. But many of the same lenders who issue loans to low-credit borrowers might also be able to work with no-credit borrowers as well. It will all come down to the specific lender, and whether they’re willing to consider things outside of credit scores, like income.
If you have a thin credit file and you need to build your credit in order to qualify for loans, there are ways to do it. Consider getting a secured credit card, a joint credit card or bank account, or using a cosigner to get a loan. All of these things may be able to help you start to build a credit history. It certainly won’t happen overnight, but using any of these strategies should help to slowly build your credit.
Just remember that once you get a credit score it’s important to maintain good financial practices in order to improve it over time. This means always paying loans and bills on time, not using too many credit cards, and not having too much debt overall.
Credit Education & Credit Reporting