Credit invisible describes individuals who lack sufficient credit history with the major credit bureaus due to having few or no payment accounts (like credit cards, a mortgage, or an auto loan). This "thin file" makes these customers effectively invisible due to traditional lending systems not having the data they would otherwise use to rate their risk. While that means they do not have a negative credit history, it still typically restricts their ability to obtain loans, credit cards, or similar financial services. Customers in this segment present more risk than a customer with a high credit score, but also present an opportunity for institutions looking to expand access while managing their credit exposure.
Use case/ examples for credit invisible
Credit access problems: Inability to access some banking services, such as mortgages or loans, due to a lack of payment history on other accounts, like revolving credit cards. The credit score assigned to a person with a thin credit history often results in banks denying these lines of credit or only offering them at interest rates substantially higher than those offered to a person with a high credit score.
