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Do Title Loans Go On Your Credit?
By marcela • February 2, 2022
If you need fast cash , a title loan might be the solution. Title loans are short-term, secured loans that allow borrowers to use the title to their vehicle as collateral. Title loans are typically processed faster than traditional loans, which is one of the many reasons why they are ideal for people who need cash right away.
But if you’re planning on taking out a title loan, it’s important to understand how this decision will impact your credit. Do title loans go on your credit ? Will a title loan hurt or help your credit score? Here’s everything you need to know:
Can You Get A Title Loan With Bad Credit?
If your credit isn’t perfect, you may be wondering whether you are even eligible for a title loan. There are typically minimum credit score requirements that you must meet when applying for a traditional personal loan. However, a title loan is not a traditional personal loan, so the eligibility requirements are different.
You will need to consent to a credit check when you apply for a title loan, which means your lender will consider your credit history when determining your eligibility. But your credit is only one factor that the title loan company will consider. Other factors, including the value of the vehicle you are using as collateral and your ability to repay the loan, will also impact your eligibility.
The bottom line? You don’t need perfect credit to qualify for a title loan . Most credit types are accepted by title loan companies , so don’t let a less-than-perfect score stop you from applying for a title loan.
Do Title Loan Companies Report to Credit Bureaus?
Title loan companies report to the major credit bureaus. These credit agencies are responsible for collecting consumers’ credit information and using it to create detailed credit reports that lenders can access for a fee.
Title loan companies send various types of information about your loan to the major credit bureaus. If you are approved for a loan, the title loan company will report the amount you borrow to the credit bureaus, so this new loan will appear on your credit report. The title loan company will also report your payment information to the credit bureaus, which means the credit bureaus will know if you are making on-time payments.
In other words, if you take out a title loan, it will go on your credit report .
How Can Title Loans Affect Your Credit?
Title loans can impact your credit in several ways.
Taking on any new debt, including a title loan, may lead to a slight dip in your credit score. However, this is only temporary, so you shouldn’t let this stop you from getting the cash you need to make ends meet.
A new title loan can impact your payment history, which is one of the main factors that affects your credit score. In fact, payment history accounts for about 35% of your total credit scor e. Making on-time, consistent payments could lead to a significant improvement in your credit score over the course of your title loan. On the other hand, missing or making a late title loan payment could harm your credit score.
Taking out a title loan could also impact your credit mix, which accounts for about 10% of your credit score. Your credit mix is a measure of the diversity of your credit accounts. If adding a title loan makes your credit mix more diverse, you may see a slight increase in your credit score.
How Long Will A Title Loan Stay On Your Credit Report?
If you check your credit report on a regular basis, you may wonder how long it will take for your new title loan to appear. Your title loan won’t show up on your credit report right away. Lenders, including title loan companies, typically report to credit bureaus every month, so it could take about 30 days for a new loan to show up.
Your title loan will remain on your credit report while you pay it off. In fact, it will remain on your credit report for some time even after it’s been completely paid off. If the title loan was “paid as agreed,” which means you repaid it in full, it could remain on your credit report for up to a period of 10 years.
Missed or late title loan payments will stick around for a while, too. If you miss or make a late title loan payment, this could remain on your credit report for up to seven years.
How to Protect Your Credit When Taking Out A Title Loan
In short, the decision to take out a title loan may impact your credit. However, your actions will determine whether your title loan has a positive or negative impact on your credit. Follow these tips to protect your credit when taking out a title loan:
- Make on-time payments. Missing or making a late title loan payment will likely have a negative impact on your credit score. Make sure you know when your payments are due, how much you are expected to pay, and what payment options are available. This way, you will be prepared to make on-time, consistent payments on your title loan.
- Borrow what you can afford to repay. If you can’t afford to repay your title loan, you may end up missing payments, which will impact your credit. To avoid this problem, you should never borrow more than you can afford to repay.
- Put your title loan money to good use. If you want to improve your credit, consider using the money you borrow to pay off your other debts. Clearing these debts could significantly improve your credit .
Following these tips can help you use a title loan to help, not harm, your credit.
How to Apply for A Title Loan
Now you should understand how a title loan could impact your credit. If you’re ready to apply for a title loan , follow these simple steps:
- Get in touch with a loan officer. You can start by filling out the form on our website or calling 1-800-227-8485 to speak to a loan officer directly. If you submit the online form, a loan officer will contact you as soon as possible to discuss the next steps.
- Get a free loan estimate . Your loan officer will ask you to provide some basic information about your vehicle, including its make, model, year, and mileage. Then, your loan officer will prepare a free loan estimate based on the information you provided. This loan estimate will tell you how much you will be able to borrow and at what interest rate. Your loan officer will be available to answer your questions and address your concerns about your loan estimate.
- Finalize your loan . If you are satisfied with your free loan estimate, you can move forward with the application* process by signing and submitting the appropriate paperwork. Your loan officer will explain what steps you need to take to complete this part of the process.
- Collect your cash. If approved, you will have access to your cash shortly after. You can pick up your cash at one of our partners’ convenient locations or have the cash sent to you via check or wire transfer.
That’s all it takes to apply for a title loan and secure the cash you need to make ends meet.
*Loan approval is subject to meeting the lender’s credit criteria, which include demonstration of ability to repay the loan. Not all applications will be approved.
The post Do Title Loans Go On Your Credit? appeared first on (EN) 1(800) Car-Title®.
marcela • February 2, 2022
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