If you are currently considering taking out a title loan, you may be asking the question “ does a title loan affect my credit ”. You may be particularly worried about this question because you have decided to get a title loan because you have a poor credit score and cannot really afford for it to get any worse than it already is. That is alright, we are very familiar with that situation. Here at TFC Title Loans, we have been hearing of a similar dilemma from thousands of our customers for nearly twenty-five years now.
Title loans are one of the only personal loans that people with a less-than-perfect credit score can still qualify for. Title loan lenders are able to do this because they base your loan approval and amount completely on both the current street value of your vehicle and your ability to repay the loan each and every month. Many people try to improve their credit but they have no opportunities to do so since all creditors reject them. We want to give those people an opportunity to improve their credit report so they can provide a bright financial future for themselves and their family.
We want to use this resource article to explain how title loans can affect your credit score for both the worse and the better. We strongly believe in lender transparency, customer support, and consumer education so you can make the most informed decision possible. Finance are not to be taken lightly since even seemingly small decisions can make a big impact on your future.
If you would like to learn more about how your credit score may be affected by an auto title loan, then please continue reading this informational article. However, if you have already decided that you do want to apply for a car title loan, then fill out our online application on our homepage right away. You will hear from one of our customer representatives shortly after applying.
Thirty-five percent of your credit score is made up by your payment history. Thirty percent is your credit utilization. Fifteen percent is the length of your credit history while your credit mix and your new credit makes up ten percent each. Getting a title loan would have the greatest impact on the payment history percentage of you credit score.
Loans that are unsecured, meaning they are based on your credit, tend to make a much larger impact on your credit score. However, loans that are secured, meaning they are based off collateral, like Car Title Loans still have the potential to greatly affect your credit score. A title loan can both improve your credit score but it also has the capability of damaging it.
If you pay off your title loan every month and on time, according to the terms set up by the lender at the beginning of the loan, then your payment history will start to look significantly better. Since the payment history takes up such a big chunk in determining your credit score, your credit score will automatically begin to improve as you continue to pay down the loan. If you plan out your payments and budget wisely then a title loan has great potential to give you a far better credit score than you had to begin with.
As with any other loan or line of credit you may take out in your life, if you do not make the payments on time or default on the loan then your credit score will go down and your credit report will look less favorable to other lenders. If you stay on top of the payments and do not default on your title loan, then this is something you have no need to worry about.
If you have been left with any questions whatsoever, then feel free to give us a call at any time. We have customer service representative standing by to take your calls and help you out with any issues or doubts that you might have. But if you are interested in using an auto title loan to improve your credit score then fill out our online application today. We are eager to work with you.