If you are looking for ways to improve your credit score, you may be wondering: do title loans build credit? It can be extremely hard to find a reliable way to borrow money when you have a less-than-perfect credit score. Most individuals need to improve their credit score before they can borrow the money they need. The only problem with that is the fact that one of the best ways to improve your credit score is to borrow money, whether in the form of a loan or credit cards, and pay it off consistently and on time. So how is anyone supposed to improve their credit score if all lending institutions reject them? Here, at TFC Title Loans, we can approve you for a loan regardless of your credit score that you can pay off in monthly installments to improve your overall credit report.
We are able to do this for our customers because we offer Car Title Loans to the residents of California, New Mexico, and Arizona. Car Title Loans are types of secured loan, which means that it is based on collateral. Unsecured loans require a stronger credit score since there is not guarantee of repayment, instead the guarantee is your history of repayment. However, with Car Title Loans, we use your car as collateral for the money that we loan you so that you don’t need to have a perfect credit score to be approved. We do check your credit during the application process but we only do this to ensure that you are not currently undergoing credit counseling or in active bankruptcy.
Ever since we first came onto the scene in 1994, we have been passionate about providing our customers with an opportunity to improve their credit score. We believe that by providing lender transparency and consumer education, you will not only be able to make the most informed decision right now but continually as time goes on so that you can provide a bright financial future for yourself and your family.
In total, your credit score is calculated through five major components. The majority of your credit score is determined by your payment history which makes up 35% of the calculation. And the rest of the score is calculated using your credit utilization (30%), length of credit history (15%), your new credit (10%), and your credit mix (10%).
If you decide to obtain a title loan through TFC Title Loans, paying that down in monthly installments would have the greatest impact on your payment history which makes up the biggest chunk of your score’s calculation. Even though secured loans do not have as large an effect on your credit as unsecured loans do, that doesn’t mean that title loans don’t affect your credit score. Taking out a title loan from TFC has the potential to significantly improve your score and build your credit report.
An auto title loan with TFC can be the perfect option to help you along in rebuilding your damaged credit score and report because you are able to obtain one while you still have a sub-prime credit score. Most of the other options for improving your credit will refuse to lend to you while you have a less-than-perfect score such as credit cards, housing agreements, and traditional loans. It is a very unfair system that dictates you have a high score but will not even give you the opportunity to improve upon it. However, title loans do not follow this model. If you make payments to your title loan lender on time according to the monthly installments set up by the repayment schedule, your credit report and score will automatically look significantly improved.
And, of course, just like any other lending option in the industry, if you do not make timely payments on your title loan then your credit may be damaged. Therefore, it is always wise to strategically plan out how you will pay back the loan in a timely fashion so your credit score is sure to be improving slowly over time. Keep an open lien of communication with us so that you can let us know if you are struggling to make payments on time. This way we can help prevent a default from occurring so we can make sure your credit is not further damaged. We want to see you succeed in paying off your loan and in improving your credit score.
If you are left with any questions about your credit score or Car Title Loans, then please give us a call. We have customer representatives standing by the phones, eager to answer all the questions you may have. But if you have come to the conclusion that you would like to get a title loan with us to build your credit, then fill out our quick and easy online application right away! We can’t wait to work with you.