Financial Literacy - Credit savvy
A cartoon family with safari hats on and a dog looking at a large rock with native symbols on it and several credit scores
Build a credit score from scratch

During the heady days of the mid-2000s, consumers were seduced by easy credit and pay-later promises. But not everyone piled on the credit bandwagon. People who weren't old enough to get credit, lived in another country or just didn't need any credit may have missed the easy-lending parade.

Post-meltdown, establishing a credit history may be a little bit tougher for people with thin credit files. But you can get credit by taking some shortcuts.

Ways to build a credit score
  • Overcome a thin credit file
  • Get around a catch-22
  • Go for retail or gas cards
  • Consider secured cards
  • Get a bank loan
  • Try "piggybacking"
  • Use alternative scores

Overcome a thin credit file

Americans don't pop out of the womb eligible for credit and sporting a FICO score. Instead, credit histories must be built, and then, with an established credit report, consumers qualify for a credit score.

People with very little credit information are said to have thin credit files.

Craig Watts, public relations director at FICO, says that his company estimates that 22 million Americans have no credit record at all, and another 30 million have thin files.

Thin files contain too little information on which to calculate a credit score.

"The common definition in the industry of a thin file is a credit report that has less than or equal to three trade lines," says John Ulzheimer, president of consumer education at

A trade line is basically an account, for instance, a car loan or a credit card account. The accounts must be on the credit report for several months before the account holder qualifies for a credit score.

"Just because you have a credit report doesn't mean you have a score. The account has to be on your report for at least three months before you start to qualify for a score," says Ulzheimer.

Once the file can be scored, the rules change a little for the borrower.

With excellent credit management -- keeping the balance reasonable in comparison to the limit and making payments on time every month -- "there is nothing to prevent a lender from offering more unsecured lines of credit," says Ulzheimer.

"That's less likely to happen now because of where we are right now. But there was a time when someone with a very thin credit report and a limited amount of information on the report was being offered pretty impressive lines of credit -- $5,000 or $10,000 lines of credit," he says.


Get around Catch-22

Today's environment means credit grantors are less willing to grant large loans willy-nilly -- and they may be downright penurious when it comes to unknown borrowers.

That's because lenders don't want to be the first to lend money to a person with an unknown risk profile.

"It's the same situation as if you were asked by a stranger at a bus stop for $50 and they promised to pay your back," says Watts.

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