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is there a way to grant access to individual files in a report library? So can I have a report library, and in it a folder and in the folder 3 files where only some people can access file one, and some other people can access file 2, and so on.

I thought about creating groups but not sure if this is the right approach because my SharePoint site already has groups to control who can access different parts of the site.

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This answered my question:

https://support.office.com/en-au/article/Edit-permissions-for-a-list-library-or-individual-item-5b900de3-9123-41c9-aa04-919ae6606d40

You break the inheritance, then remove all users, then add who you want.

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