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Will a Car Title Loan Impact My Credit?

Will a Car Title Loan Impact My Credit?

By 9  am on

Auto title loans are a quick financing alternative for those who are in a financial bind. These types of loans provide an easy way to get the money you need now without having to wait for weeks for a traditional bank loan. While these loans may be set up somewhat differently than other types of loans, at the end of the day, they’re loans.

Reporting Debt to Credit Bureaus

As with most lenders, a car title company will report your loan information to the credit bureaus so the amount of debt you owe is properly reported. When lenders look at your credit report, they assess all your monthly payments to get your total monthly debt service. When the car title loan company reports your new debt, all other lenders will be able to properly assess your debt service with the car title loan monthly payment included.

Enhancing Your Credit with On-Time Payments

Apart from reporting the existence of your car title loan debt, your car title loan lender will also report your payment history. If you make your payments by the due date, your loan report will show a positive payment history, which can positively impact your credit score, as about 35 percent of your overall credit score is based on your payment history. However, if you’re late making your payments for your car title loan, that will negatively affect your payment history and credit score.

Rebuilding Your Credit with a Car Title Loan

If you have a low credit score, you’ve probably missed payments or defaulted on loans in the past. It’s difficult to get approved for any type of funding when you have a poor credit score. Car title loans are a popular type of funding for those with lower-than-average credit scores because these short-term loans are usually based on the value of your collateral instead of your credit score. Therefore, when they have bad credit and get car title loans, San Diego residents who make payments on time can boost their credit scores. The more on-time payments you make, the higher you can increase your credit score.

Using Car Title Loans for a Variety of Expenses

The great thing about car title loans is that you can use them for virtually anything you want. Whether it’s paying for an unexpected utility bill or simply rebuilding your credit, a car title loan is there for you when you need it. Some of the most common reasons consumers opt for car title loans include unforeseen medical bills, funeral expenses, bail money, unexpected car repairs, and simply bridging the gap between paychecks.

If I need a convenient, quick way to get cash, I’ll look for title loan places near me. San Diego folks who do the same and want high-quality service need look no further than Payless Car Title Loan. Our loan process is easy, and you’ll find the highest levels of professionalism when you work with our team. Call us today at (619) 600-0061 to find out how we can help.

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