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How to Get a Title Loan With Bad Credit
By Marcela De Vivo • Sep 08, 2022
Your credit score, which can range from 300 to 850, is a number that represents your credit risk. In other words, it tells lenders how likely you are to repay the money you borrow. The higher your credit score, the more likely you are to pay back your loan on time.
Having a good credit score can make it easier to qualify for traditional personal loans, credit cards, mortgages, and other lines of credit. In fact, many lenders establish minimum credit score requirements that borrowers must meet to qualify.
If your credit score isn’t perfect, you may wonder what your options are when it comes to borrowing money. Fortunately, you may be able to qualify for a title loan even if you don’t qualify for a traditional personal loan as a result of your credit. Here’s
how to get a title loan with bad credit:
How Do Title Loans Work?
Before learning about how your credit will impact your application, it’s important to understand how title loans work. Title loans are not like traditional personal loans because they are secured by collateral. To obtain a title loan, you must use the title to your vehicle as collateral. Title loan companies typically accept titles to many different types of vehicles, including sedans, SUVs, pickup trucks, minivans, coupes, convertibles, RVs, and motorcycles.
You won’t lose access to your vehicle if you choose to use it as collateral to secure a title loan. Your lender will allow you to continue driving it while you make payments on your loan. However, the lender will put a lien on your title or hold onto a physical copy of it until your loan has been paid off.
As long as you continue to make payments on your title loan, you will remain in possession of your vehicle the whole time. However, if you stop making payments, the lender has the right to take possession of your vehicle to satisfy your debt.
Do Title Loan Companies Check Your Credit?
The first thing you may want to know is whether the lender will check your credit when you apply for a title loan. The answer to this question is yes, you will need to consent to a credit check to apply for a title loan.
Performing a credit check involves more than just looking at your credit score. A credit check gives the title loan company an opportunity to see your credit history and evaluate how well you have managed debts in the past. It allows the title loan company to assess the risk of lending you money.
If you have defaulted on debts in the past, for example, this makes you a riskier borrower. If you have never defaulted on any debts, however, you are less of a risk to the lender.
Can You Get a Title Loan With Bad Credit?
The thought of getting your credit checked by a lender may be nerve-wracking, but you shouldn’t let this scare you away from applying for a title loan.
The title loan company will consider your credit when determining your eligibility, however the lender will also consider other factors, including your car’s resale value and your ability to repay the loan. Because your credit isn’t the only factor that is taken into consideration, you don’t need perfect credit to
qualify for a title loan.
Remember, title loans are not like traditional personal loans. In fact, you may qualify for a title loan even if you don’t qualify for a traditional personal loan as a result of your credit. This is because unlike traditional lenders, title loan companies accept most credit types.
Can You Add a Co-Signer to Your Title Loan Application?
You may qualify for a title loan even if your credit score isn’t perfect. However, there is one other way to get approved for a title loan even if you don’t qualify on your own. Find someone with good credit who is willing to co-sign your title loan application.
A co-signer is someone who agrees to take responsibility for paying back your loan in the event you are unable to do so. In other words, if you stop making payments on your loan, the co-signer is responsible for satisfying your debt. The person who co-signs your application will not receive any of the money you are approved to borrow.
Adding a co-signer with good credit to your application reduces the lender’s risk, which will make it easier to get approved for a title loan.
How to Improve Your Credit Before Applying for a Title Loan
If your credit score is low, you may want to take the time to improve it before applying for a title loan. By improving your credit score, you could qualify for better terms, including a lower interest rate, which could save you money over the course of your loan. Here’s what to do to increase your credit score:
- Avoid taking out new lines of credit. Don’t open any new credit cards or apply for any new loans.
- Make payments. The best way to improve your credit score is to make on-time payments on your debts.
- Review your credit report. Pull your credit report using a free tool such as Credit Karma. Then, review your report to look for errors. If you spot an error, contact the credit bureau to have it removed from your credit report.
- Don’t make large purchases. Try to avoid making large purchases on your credit cards. Making large purchases will increase your credit card balance, which will lower your credit score.
Follow these tips for several months and you should see a noticeable improvement in your credit score.
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Marcela De Vivo • Sep 08, 2022
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USA Patriot Act Disclosure: Important information about procedures for opening a new account
To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. What this means for you: When you apply for a loan, we will ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver's license or other identifying documents.
Loans may be made by one of several lenders, including: First Electronic Bank, a Utah-chartered industrial bank located in Salt Lake City, Utah, Member FDIC; Wilshire Commercial Capital L.L.C. dba 1 (800) Car-Title and Wilshire Consumer Credit, a licensed lender in certain states. Loans not available in all states. In California, loans are made pursuant to a Department of Business Oversight California Finance Lenders License. See State Disclosures for additional information.
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Wilshire Commercial Capital, LLC dba 1 (800) Car-Title and Wilshire Consumer Credit is located at 4727 Wilshire Blvd, Suite 100, Los Angeles, CA 90010.
TO REPORT A PROBLEM OR COMPLAINT WITH THIS LENDER, YOU MAY WRITE OR CALL Tracy Bergiman, Director of Compliance, 4751 Wilshire Blvd. Suite 100, Los Angeles, CA 90010, 323-837-5775, tbergiman@westlakefinancial.com.
New Mexico Only: This lender is licensed and regulated by the New Mexico Regulation and Licensing Department, Financial Institutions Division, P.O. Box 25101, 2550 Cerrillos Road, Santa Fe, New Mexico 87504. To report any unresolved problems or complaints, contact the division by telephone at
(505) 476-4885 or visit the website: https://www.rld.nm.gov/financial-institutions/.