this post was submitted on 25 Jul 2024
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A Boring Dystopia
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"Since I got my first credit card, I used it for all my purchases but paid it in full each month, building a good score — or so I thought. When I went for a car loan, I was denied because I was a 'thin file,' meaning I never paid any interest."
My friend just got denied a mortgage because of this bullshit. Like what the actual fuck!? You're a responsible borrower but you committed the ultimate sin of NOT PAYING THEM INTEREST!
... Like what the fuck?
This Experian FAQ article indicates "thin file" is about number of credit accounts, not amount of interest.
https://www.experian.com/blogs/ask-experian/what-is-a-thin-credit-file-and-how-will-it-impact-your-life/
Yes. Credit score is simply how much you borrow and how often you repay it. The thinking is that, with a thicker file (more accounts paid), there’s less risk.
This can cause some real fuckery: they want to see different types of loans, so student loans with no missed payments is good for your credit despite being bad for your life. It doesn’t care if there’s interest. The misconception may occur because with almost every type of loan, there is interest.
I’ve been fortunate enough to never need a loan and my credit did slightly suffer because of that. That said, any 18 year old can open a starter credit card and get a score of >700 within the year as long as they don’t miss a payment.