When a credit report shows "insufficient credit," it typically means that the individual does not have enough credit history or activity to assess their creditworthiness and generate a score. This can occur in several situations:
Limited Credit History: If an individual has no credit history there is not enough information to generate a reliable credit score. This is common for young adults or individuals who have not used credit cards, loans, or other credit products.
Thin Credit File: A "thin credit file" refers to having a few credit accounts or only a small amount of information within credit report. This can lead to an "insufficient credit" status because there isn't enough credit data.
New Credit Accounts: TransUnion requires atleast 6 months of credit data to generate a score. If an individual has new credit accounts but the oldest account is less than 6 months old, the results will be insufficient credit.