Blonde Wizard

Here is Something New


Do Title Loans Build Credit?

How Can a Bad Credit Score Impact My Life? 

Any late payments can negatively affect your credit score if you struggle to pay your bills. Poor credit can make applying for cars or apartments challenging, and a low score can also cause higher interest rates on other loan options. 

In some cases, future employers may run a credit check before hiring you and deny you an offer, especially if you’re applying for a position that handles money. Overall, having a bad credit score isn’t recommended for many reasons. However, building your credit score back up can take years of work that only some have the luxury of. 

That is why car title loans can be excellent loan options for people with bad credit because your history isn’t a significant determining factor of approval. While lenders will run a credit check, they care more about your car’s value and if you have consistent income for repayment. 

Title loans can also be hassle-free for people who need cash quickly but don’t want to deal with the stress of a traditional option. As long as you don’t default on your title loan, you don’t necessarily have to worry about it affecting your credit. However, these rules can vary depending on which state you’re in.

Read on to learn more about how title loans can affect your credit score and if they can have a positive impact. 

How Does a Credit Score Work?

Credit scores are numbers given to adults that determine their creditworthiness or financial responsibility. Lenders look at these numbers when deciding whether or not to loan money to people, and the higher your number is, the easier it may be to obtain financing. 

A credit score is between 300-850, and anything below 620 is considered poor, while above 640 is considered fair or excellent. Achieving an 850 credit score is possible, but it can take years of hard work and is only sometimes feasible for many people. Generally, if your score is above 670, you should be able to apply for things quickly.

Several factors can contribute to a credit score. The number of accounts you have open, the amount of debt you’re in, and your repayment history can impact this number. 

Three main credit bureaus collect, analyze, and disburse information about a person’s credit score. If you are interested in improving a bad credit score, there are many ways to begin the process. However, changing this takes time. You can:

  • Pay All of Your Bills on Time
  • Increase Your Available Credit Line 
  • Keep Credit Card Accounts Open Even if You Don’t Use Them

Paying all your bills on time can have the most reliable impact on your credit score. Additionally, increasing your available credit line can improve your credit utilization rate. Finally, it may make sense to close out accounts you don’t use anymore, but that can have the opposite effect on your score. You can stop using them, but the older you have an account open, the better that can reflect on your number! 

How Can Title Loans Affect Credit Scores?

The answer to the questions “do title loans build credit” is yes and no. Because title loans rely on collateral, if you miss payments, lenders may repossess the vehicle to satisfy their debt. Reports to the major credit bureaus happen when unsecured loans aren’t paid back, causing your insurance rates to go up. 

However, if you default on a title loan, title lenders may report you to the major credit bureaus, which can negatively affect your score. As a rule of thumb, it’s always a good idea to make your bill payments on time, no matter what type they are. If you pay off your title loan, that will also be reported to the bureaus. 

Contact a lender immediately if you’re struggling with your title loan payments. They may be able to write up alternative terms to give you more time to pay the money back. Not paying back your title loan can result in car repossession, but this is typically the last resort a lender wants to take. 

Inquire About an Online Title Loan Today With Bad Credit!

There can be many obstacles in life when you suffer from poor credit. Applying for a job, apartment, or car can become a big hassle. If you need to access cash quickly due to an emergency but have a bad credit history, inquiring about title loans could be the solution! The process can be quick and convenient. 

Start today by filling out this pre-approval form or calling to speak directly with a title loan agent.