23 Jun 2022

How To Remedy A Thin Credit File?

How To Remedy A Thin Credit File

If you have a thin credit file, it can be difficult to obtain financing. Even if you’re able to get financing, you’ll often face much higher interest rates.

Having a thin credit file can have a negative impact on multiple aspects of your life, costing you big over many years. It’s in your best interest to fix your credit as quickly as you can.

Here are a few strategies we recommend for beefing up a thin credit file.

Apply For A Secured Credit Card

One of the best things to do if you want to build your credit file up is to apply for a secured credit card. You’ll have to make an upfront deposit for your secured credit card, and that initial deposit amount will be tied to your credit limit. If you’re unable to make credit payments, the lender will get to retain your deposit.

How To Remedy A Thin Credit File
How To Remedy A Thin Credit File

Most lenders are willing to provide secured credit cards to people without a credit history, as they have funds to back it up. The credit card issuer will then report your credit card account activity to credit bureaus as you make payments, which will boost your credit score as long as you make payments in full and on time.

Take Out A Credit Builder Loan

If you want to build your credit file, you might consider using a credit builder loan. These are different from traditional loan products in that you don’t get access to funds right off the bat. Instead, you get an earmarked savings account with the loan principal and the interest will remain in the hands of the lender.

Once the loan term is up, you’ll receive the principal amount in a lump sum. To unlock this balance, you will need to make on-time payments regularly.

Add Authorized User Tradelines

Credit tradelines are accounts that appear on your credit reports, such as a credit card or a mortgage. However, the beauty of tradelines is that you can use them as an authorized user. Many people will ask friends or family members who have good credit to become authorized users on their accounts so they can build credit.

However, if you don’t have that option, there are many companies out there, such as Boost Credit 101, that sell quality and reputable authorized user tradelines.

It’s important not to confuse authorized user tradelines with credit repair, as tradelines only work to build credit, not repair derogatory marks.

Final Thoughts

At the end of the day, authorized tradelines add good credit history to your credit history. You might still need to work to repair any negative marks on your report to remedy your thin file, though these authorized tradelines could improve your scores in just a few days!

You don’t have to wait for your own accounts to age, as authorized tradelines add seasoned accounts to your credit history. Make sure to get in touch with us here at Boost Credit 101 if you have any further questions!

We look forward to hearing from you!