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Mortgage Denied Due to Inactive Credit History

Dear Experian,

How can I get my credit file updated? I have paid off two loans and made every payment on time. However, when I tried to get preapproved for a home loan I was told my credit report was inactive because there has been no change to my report in six months.


Dear PAT,

When you paid off your installment loans, they were updated to show “paid” and no longer had new payment activity reported, resulting in no updates being made to your credit report in months or possibly years.

Credit scoring systems typically need several months of recent payment history in order to calculate a score. With no payment activity for more than six months there simply is not enough information about how you manage your debts to calculate a credit score.

Your situation is a good example of why it is important to keep at least one or two credit card accounts open and active. Although previous accounts with positive payment history are a good thing to have, you still need to establish and maintain a sufficient record of current activity before a score can be calculated.

Consider opening at least one credit card account. Since you have no current history to score, you may have to apply for a secured card. Use the credit card to make small purchases from time to time. Keep the balance low compared to the credit limit, and pay your balance in full each month.

Eventually you will be able to qualify for the home mortgage. It will just take time, patience and demonstrating that you are currently and consistently managing credit well.

Thanks for asking.
 The “Ask Experian” team

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