Are you currently in the middle of a financial emergency? If you are, then you are likely weighing all your various options carefully so that you can make the best decision for getting emergency funding that won’t lead to another financial crisis later on down the road. Perhaps you are even considering taking out an auto title loan on your vehicle since you know it might be a little difficult to get a regular personal loan from the bank because of your credit score. You likely already know that you can be approved for title loans regardless of credit score but you may still be wondering do title loans go against your credit once you actually get one. It is something important to consider whether your credit score could be damaged or even possibly improved by an auto title loan. Here, at TFC Title Loans, we want to help answer that question and any other questions that you might need answered before making the decision on whether or not to apply for an auto title loan.
Car Title Loans are one of the only loan options out there for individuals with a less than perfect credit score. Title loans do this by basing the loan application approval and the amount of the loan on the current equity found in your car and based on your ability to repay the loan according to monthly payments. Many people would like to improve their credit score with a loan or a new line of credit but they are given absolutely no opportunities. But we, at TFC, want to give them an opportunity to improve their credit score so they can have a brighter financial future! In this resource article, we will be explaining to you how title loans can help improve your credit immensely and, also, how it might potentially damage your credit if you do not handle the loan carefully. We want you to have all the information before making a decision since finances are not to be taken lightly.
If you’d like to learn more about improving your credit score with a title loan, then continue reading this article. But if you are already prepared to start the process of applying then fill out our simple and convenient online application today. You will hear from us shortly after submitting it!
Your credit score is made up of five different parts, each taking up a certain percentage of the total credit calculation:
Obtaining an auto title loan through TFC Title Loans would have the greatest effect on the payment history part of the calculation in your credit score. This means that depending on how well you make the monthly payments, a title loan can both improve your credit score but also be capable of damaging it in some ways.
If you make the scheduled payments on time each and every month to pay down your title loan by the time it is designated to reach maturity, then the payment history percentage in your credit score calculation will start to appear significantly better. Since the biggest chunk of your credit score is actually your payment history at 35%, you will likely see a big improvement in your credit score by the time you finish making the payments. Therefore, it would be wise to strategically budget out your payments so that you make them all on time and always have enough money to pay!
Just like with any other loan option out there or any other life of credit, if you do not make the payments on time or you default on the loan then your credit score is bound to take a substantial hit and you will likely look far less reliable to other lenders in the future. However, if you pay close attention to the payments and get them in on time every month then you won’t default on the loan and you will have positively nothing to worry about!
If you have any more questions on the subject then simply give us a call, we would love to hear from you and look forward to working with you!