Skip to main content

3 common credit issues and what you can do to fix them

Your credit history can determine if you can get a loan, and even where you live or work. Credit scores are built from your credit history and can determine how much you pay to borrow money for a car or house. Yet, many people don’t know where to start when it comes to building, improving, or protecting their credit history. Three common credit problems are:

  • Lack of enough credit history
  • Denied credit application
  • Fraud and identity theft 

Below are some tips on how to deal with these issues.

1. Lack of enough credit history

Many people may not know that having no credit history, or a limited credit history, can create issues similar to having negative information in your credit history. If you don’t currently have a credit history, you’re not alone. One in ten adults experience "credit invisibility," meaning they do not have any credit history with one of the three nationwide credit reporting companies. Many more don’t have enough of a credit history, sometimes referred to as having "thin" credit, to generate a credit score. People with thin or no credit history may find it difficult to apply for a loan or rent an apartment. 

What you can do:

Take action to help build your credit history responsibly. There are a number of products considered helpful in establishing or rebuilding credit histories, and they provide you with the opportunity to practice making on-time payments that are reported to the credit reporting companies. These may include secured credit cards, credit builder loans, or retail store credit cards. 

Use our Building credit from scratch  checklist to learn more about these and other ways to build your credit history.

2. Denied credit application

If you’ve been denied an application for a loan or line of credit, there are steps you can take to improve your credit score or dispute inaccurate information on your credit report. 

What you can do:

3. Fraud or identity theft

Identity theft occurs when someone uses your name, Social Security number, date of birth, or other identifying information, without authority, to commit fraud. 

What you can do:

If you think you’ve been a victim of fraud or identity theft, there are several steps you can take to protect your personal information from being misused. These steps include: 

  • Reviewing your credit reports each year to make sure they contain only information about you 
  • Immediately reporting any inaccurate or suspicious information on your credit reports
  • Placing a fraud alert or security freeze on your credit reports
  • Consider signing up for identity monitoring or credit monitoring services. Some of these services are free, and others cost money. If you’re considering these services, be aware that there are other free and low-cost services to protect consumers, including a security freeze or fraud alert. If you are considering signing up for identity or credit monitoring services, make sure you fully understand the terms and conditions related to trial periods, fees, cancellation requirements, and other conditions so that you don’t face unexpected fees, charges, or other limitations.

If you were impacted by the Equifax data breach, we have additional information on the steps you can take to respond when your personal information is exposed in a data breach.

Next steps

Building or rebuilding your credit will take time and planning. The steps above can guide you on your journey.

If you want more help, consider talking to a credit counselor. Most reputable credit counseling organizations do provide free educational materials and workshops, though some do not. Building or improving on your credit won’t happen overnight. Anyone who claims to be able to do this for you may be scamming you.

To learn more about credit reports and scores, check out our tips and frequently asked questions.

Join the conversation. Follow CFPB on X (formerly Twitter) and Facebook .