"Insufficient credit history" means a lender looked for your credit score and there wasn't enough information in your credit file to calculate one. It doesn't mean your credit is bad. It means your file is thin or empty, and you can fix it by adding accounts that report on-time payments.
Why you might not have a score
Credit scores are calculated from the accounts in your credit reports at Equifax, Experian and TransUnion. If a scoring model doesn't find enough recent activity, it can't produce a score. Common reasons:
- You've never had a credit card or loan in your own name.
- Your only accounts are very new.
- Your accounts were closed or haven't been updated in a long time.
- You've used cash, debit cards or someone else's accounts for years.
- You're new to the U.S., and your credit history from another country doesn't carry over.
What it takes to get a score
| FICO Score | VantageScore | |
|---|---|---|
| Generally needs | At least one account open for six months or more, and at least one account reported to the bureau in the last six months | Can often score files with less history, including newer accounts |
| Used by | Most lenders, especially for mortgages and auto loans | Many credit card issuers and free credit score apps |
That's why you can see a score in a free app and still be told by a lender that you don't have one. They may be using different scoring models.
If a lender turned you down
When a lender denies you because of your credit report, it has to send you a notice that says why and which credit bureau it used. That notice also gives you the right to a free copy of that report within 60 days. Get it, and check that your name, addresses and any accounts are correct. A file can look empty because of a mix-up, such as accounts reported under a different version of your name.
Ways to build a credit history
- Secured credit card. You put down a deposit, usually a few hundred dollars, and that becomes your limit. Use it for a small purchase each month and pay the full balance on time. Check that the card reports to all three bureaus.
- Credit-builder loan. Offered by many credit unions and some apps. The money is held for you while you make payments, and the payments are reported to the bureaus. You get the money at the end.
- Become an authorized user. A family member with a long, on-time card history can add you to their card. Many scoring models count that account's history in your file. Their late payments can hurt you too, so pick someone who pays on time.
- Get rent or bills reported. Some landlords and services report rent, utility or phone payments to one or more bureaus. Ask before you sign up whether there's a fee and which bureaus it reports to.
How long it takes
With a new account reporting on-time payments, many people have a FICO Score within about six months. Building a strong score takes longer. Keep balances low compared with your limits, and never miss a payment.
What to avoid
- Opening several new accounts at once. Each application can add a hard inquiry.
- Paying fees for a "new credit identity" or a CPN. Using one to apply for credit can be a federal crime.
- Carrying a balance to "build credit." Paying in full each month builds credit just as well and costs nothing in interest.