Introduction

Lenders increasingly look beyond credit reports to evaluate people with limited credit histories. Alternative data—rental payment records, utility and telecom bills, bank-transaction histories and other permissioned records—can help thin-file borrowers demonstrate steady repayment behavior and access credit products otherwise out of reach.

How lenders use alternative data

  • Rent and utility reporting: Some lenders and scoring models accept verified rent and utility histories as evidence of on-time payments (see Rent Reporting and Your Credit Score: Can On-Time Rent Help?).
  • Bank-transaction analysis: Lenders may review income and cash-flow patterns from linked bank accounts instead of relying solely on credit accounts.
  • Verified income and employment records: Third-party verification services can speed underwriting for applicants without tradelines.

Practical steps thin-file borrowers can take

1) Report on-time rent. Ask your landlord about rent-reporting options or use rent-reporting services that submit payment history to credit repositories. See How Rent and Utility Reporting Can Improve Personal Credit Scores for options and best practices.
2) Add utility and phone payments. Products and services (for example, some bureau tools) can incorporate utility and telecom payments into a consumer file when you give permission. Always confirm which credit bureau(s) the service reports to.
3) Share bank data securely. Use lenders or fintechs that accept permissioned bank-transaction data to show steady deposits, savings and recurring bills. Carefully review what you authorize and how long access lasts.
4) Use credit-builder products. Secured cards, credit-builder loans and reported rental/utility history together create tradelines that help convert a thin file into an active credit file.
5) Collect documentation. Maintain 12 months of paystubs, bank statements, leases, and utility bills to support manual underwriting when automated scoring doesn’t capture your profile.
6) Choose the right lenders. Credit unions, community banks and specialized online lenders are more likely to consider alternative data than large national lenders. Ask prospective lenders how they underwrite thin-file borrowers.

What to expect — limits and realities

  • Not universal: Acceptance of alternative data varies by lender, scoring model and credit bureau. Using these sources doesn’t guarantee a better score or approval.
  • Bureau coverage differs: Some alternative data may be available only to one credit bureau or to certain scoring models.
  • Privacy and consent: Providing transaction data requires permission. Read privacy policies and limit access to specific accounts when possible.
  • Scams and fees: Beware third-party services that charge high upfront fees to “fix” your credit. Prefer transparent, low-cost or free options.

Quick tactics I use with clients

  • Start by asking the landlord to report rent directly or sign up for a low-cost rent-reporting service rather than paying for expensive credit repair programs.
  • Combine rent/utility reporting with a small secured card or credit-builder loan; the combination often opens more lender doors than either strategy alone.
  • Keep digital copies of bills and a 12-month payment history file to speed manual reviews.

Internal resources

Authoritative sources

Professional disclaimer

This article is educational and does not constitute personalized financial or legal advice. For recommendations tailored to your situation, consult a qualified financial counselor or lender before acting.