05 Dec 2016   /   0 comments

How Do Title Loans Affect Your Credit


If you make the monthly payments on time and repay the loan in full then your credit score will increase. However, if you miss payments or default on the loan then your credit score might decrease.


At TFC Title Loans, we receive the question “how do title loans affect your credit?” very often. So often, in fact, that we decided we needed to write an informational article on the topic. It makes sense that so many people ask this question since your credit score is an incredibly important part of your finances and if you have a bad score, you may be denied a lot of opportunities that you would otherwise easily receive.


For 25 years, we have lent a helping hand to individuals just like you with a less-than-perfect credit score to assist them in obtaining emergency funding quickly. Title loans are secured loans which means that they are based on collateral rather than your credit score. A title loan can even give you the opportunity to improve your credit score so that you can take advantage of more traditional lending opportunities in the future.


Ever since we opened our doors in 1994, we have made consumer education a top priority. We don’t just lend you the money you need but we also work hard to make sure you understand the lending process in its entirety. It’s important to us that you are capable of making the most informed decision possible to benefit your finances. We are passionate about customer service and would love to explain to you how a title loan could possibly affect your credit score overall. If you wish to learn more then please continue reading. If you have decided that a title loan is the best option for you to rebuild your credit, then fill out our online application or give us a call today!



Your credit score is made up of five major components. A majority (35%) of your credit score is determined by your payment history. The rest of the score is determined by your credit utilization (30%), length of credit history (15%), your credit mix (10%), and new credit (10%). A title loan would have the greatest impact on the payment history part of your credit score.


Unsecured loans usually make a bigger impact on your credit score than secured loans with collateral like title loans. However, that does not mean that secured loans do not affect your credit score because they still do. Just not quite as much. Taking out a title loan from TFC Title Loans has the potential to greatly improve your credit and the possibility of damaging it if it is treated carelessly.

Ways a Title Loan Could Improve your Credit

A title loan can be the perfect helping hand to rebuild your damaged credit score because you can get one while you still have bad credit. Many other options for improving your credit won’t lend to you while you still have a bad score like credit cards, traditional loans, or housing agreements. It is an extremely unfair trap. They want you to have a good score but will not give you the opportunity to improve it. Title loans are different. By simply making payments to your lender on time according to the repayment schedule, you will automatically make your credit report look better.

Ways a Title Loan Could Damage your Credit

Just like any other lending option, not making payments on a title loan is not good for your credit report which is why it is a good idea to plan ahead when looking at your repayment schedule. To make it easier on yourself, you can even plan to cut down on some unnecessary expenses so you do not miss any payments. If you do default on the loan or miss payments, it will negatively affect your credit score but since it is a secured loan rather than an unsecured loan, it will not negatively affect your credit as much as a different lending option might. And if you keep an open line of communication with us if you are struggling with payments then we can help prevent a default from occurring.


Rebuilding your credit through a title loan from TFC Title Loans can help you build a strong financial base that will make it so you are capable of applying for lower-interest loans from traditional lenders in the future. So, if after reading this, you are left with any remaining questions regarding the affect that title loans have on your credit score then give us a call and we would be happy to answer them. However, if you are ready to get started with your title loan application then fill out the online form today!

How Much Cash Can i Get?

© TFC Title Loans
All Rights Reserved

Follow Us

Lenders Law Licence Number by DBO 6038192