How Title Loans Could Help Improve Your Credit Score
Having a good credit score can earn you a lot of money-saving advantages in the world of lending. It’s much easier to qualify for a lower rate on a mortgage and the best credit card offers. Or, if you rent, you’ll probably get a better rental agreement since your potential landlord won’t see you as a risk. According to CreditSesame, a good credit score often called your FICO score, ranges from 700-749, and bad credit is considered to be 550 and below.
CNN reports that only about 20% of Americans have a credit score above the 700 mark, so what does that mean for 80% of the rest of the country?
Does it mean that you just can’t qualify for a decent loan or credit card with a reasonable APR? And if that’s the case, what are your alternatives?
Considering Title Loans And Your Credit Score
Auto title loans are a handy financial resource that functions as a short-term strategy when you’re facing tough times and need money quickly. They provide a cash cushion that few other lenders can when you are facing an unexpected expense or cash emergency.
The best part is that you can keep driving your car while its title serves as collateral for the loan. Qualified candidates can get loan amounts up to $15,000, depending on the value of the vehicle they own. Note that this is only the case when the vehicle is paid off and no one else can legally claim it.
It is, however, important not to rush into this kind of loan. Research all your options before making this important financial decision. And of course, plan it out well so that you can pay back what you owe as soon as possible. Even more importantly, make sure you take out only what you can pay back later. This short-term system is meant to decrease your financial burden, so take the time to examine your motives and ability to handle a loan payment in the amount that you want to take out.
The Title Loan Process From Start To Finish
Here’s how to begin the simple approval process for a bad credit title loan: Fill out an online request form with your basic personal info. Next, a local store representative will contact you after they’ve received your inquiry. During that call, the loan agent will explain the requirements needed to qualify and answer any questions you have. You will also be asked to schedule a time to meet to get the application process going. You can do this in person at a store location or you can apply online and have a representative come to you. Either way, be sure to gather the required items listed below before heading to the meeting:
- Your vehicle for inspection (to determine the amount you can borrow)
- Lien-free title (to prove that you own the vehicle being used as collateral)
- State-issued I.D. (to show you are of legal age to apply for a loan)
- Proof of income (this may be requested to prove you can make repayment on the loan)
When you meet with the store representative, it will only take around 30 minutes to complete the quick vehicle inspection and review your documents. Remember, you can keep and drive your vehicle while repaying your title loan.
Are Title Loans Good For Bad Credit?
Title loans are short-term loan options that are available to people who have bad credit or even no credit history at all. So, yes car title loans are a good option to consider when you experience a financial emergency that requires you to borrow money because loan approval isn’t based on your credit score like traditional bank loans, it is a secured loan that requires collateral for approval.
If you want to improve credit score with title loans or want to know how title loans affect credit score over time, the answer is, that they don’t increase or affect your score. Title loan lenders like us at Missouri Title Loans, Inc. do not report to credit bureaus, like Transunion or Experian.
Getting a title loan can help you with an urgent expense if you have poor credit and need a cash loan right away, but to answer your question, “Are title loans good for bad credit?”, they are neither bad nor good. They do not offer any improvement at all.
Understanding The Role Credit Plays With A Car Title Loan
Now that you know the answer to “How title loans affect credit score over time?” and if you can improve credit score with title loans, here’s how getting one could help your credit in a less obvious way.
As mentioned earlier, getting a bad credit title loan will not be reported to any credit agencies like credit cards or other accounts, so it will not impact your score whatsoever. But they can give you breathing room by improving your ability to pay off emergency payments and debts so that they do not worsen over time, which can help your credit in the long run.
Get A Title Loan Today!
If this loan option sounds like something that would work for you and your debt, now’s the time to do it. Once you get your financial burdens under control, you could find yourself less stressed, more available to work on your principal financial goals and enjoy an overall higher quality of life.
Want to know more? Contact Missouri Title Loans, Inc. by completing the online inquiry form, and one of our helpful customer service representatives will call you to answer all your questions.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.