Some individuals lack credit scores due to thin credit files, making it challenging to borrow money or lease an apartment. The CFPB reports that 9.8% of adults fall into this category, with 3.9% having insufficient credit and 5.9% having stale credit. This can lead to resorting to high-cost loans like payday loans with rates around 400% APR.

Groups disproportionately affected by thin credit include low earners, minority groups, and residents of the South. Having a thin credit file can result in difficulties securing loans, credit cards, apartment leases, and job opportunities requiring credit checks. It is crucial to add new information to credit reports to improve creditworthiness.

To address thin credit, individuals can check for errors on their credit reports and dispute inaccuracies. Becoming an authorized user on a family member’s credit card or obtaining a secured credit card from a local credit union are viable options. Credit-builder loans can also help establish a positive payment history, while store credit cards should be used cautiously due to high interest rates.

Read more at Yahoo Finance: What is a thin credit file?