How to Strengthen a Thin Credit File

A couple sitting on the hardwood floor of their home looking at tax documents.
Dear Experian,

Are credit services right when they say getting a secure credit card can help increase your credit score if you have a thin file?


Dear API,

A "thin" credit file typically means a credit history of less than five accounts or one where the accounts on it have been open for just a short time. A "thick" file generally is one that has more than five accounts that have been open for longer periods of time.

If you are unable to qualify for a traditional credit account due to having a thin file, getting a secured account is one option that could help you begin building a stronger credit history.

What Is a Secured Account?

With a secured credit card account, you'll pay a security deposit the card issuer then sets aside and uses as collateral. Often, your secured card's credit limit will equal the amount of your deposit. If you miss a payment on your account, the credit card issuer can take the money from the savings account to cover the amount you owe on the card. Because the account is "secured" by the deposit you provided, there is less risk to the lender, so secured cards are easier to qualify for than a traditional unsecured credit card account.

You'll eventually get your deposit back if you pay off the account and close it without missing any payments or if you're graduated to an unsecured card.

Keep in mind that if you don't pay on time and the lender uses the money from the savings account to cover the debt, they will still report the account as late to the credit reporting agencies. Therefore, it's important that you make all payments on time, especially if you are using the account to strengthen your credit history and improve your credit scores.

How Else Can I Build My Credit History?

If you have a limited credit history and are trying to make your thin file thicker, a secured card is just one way to get your foot in the door. Here are some other options to consider:

  • Ask to have your rent payments reported. If you are renting, talk to your landlord. Your lender can report your positive payment history to Experian.
  • Sign up to have utility payments reported. With Experian Boost®ø, you can have your positive utility and cellphone payments added to your Experian credit report. When you sign up, you will link the bank account you use to make these payments and can choose which accounts to add payment history for, going back up to 24 months.
  • Become an authorized user. If you have a family member who responsibly pays off their credit card, ask if they are willing to add you as an authorized user on the account. If you're added, the account may show up on your credit report and help your credit scores. Not all lenders report their authorized user accounts to all three credit reporting agencies (Experian, TransUnion and Equifax), but many do, so check with the lender ahead of time.
  • Ask a family member to cosign. You may be able to open an account of your own if someone with a strong credit history cosigns the agreement. Having a close family member or friend cosign for a credit card or loan can you help you get the credit you need while strengthening your own credit history. Keep in mind that any missed payments or high credit card balances will hurt your cosigner as well as you, so be extra careful to use the account responsibly.

Thanks for asking.
Jennifer White, Consumer Education Specialist

This question came from a recent Periscope session we hosted.