Do Title Loans Go On Your Credit

Considering A Title Loan?

If one of the main reasons you’re considering a title loan is because you have a bad credit score, then you’re likely wondering do title loans go on your credit? The short answer is that yes, title loans can go on your credit score and affect it positively or negatively.

Credit scores are a complicated subject, and that’s why we’ve broken down how they work and how a title loan can affect them below.


Getting a Title Loan with Bad Credit

Title loans are an excellent option for bad credit title loans because there’s no credit check involved in the application process. Instead, you’re using a piece of property to secure your loan, and in this case, the property is your car. For a typical title loan, car will need to fulfill two requirements:

  • The title is in your name
  • There is no lienholder on the title

There are, however, title loan companies that offer second lien title loans.

Once you get a title loan, you’ll need to pay it back by the end of the term. If you’re short on cash and need assistance with repayment, you can always extend the loan by paying only the interest and fees. This ends up costing you a bit more for the interest and fees in the new term, but it’s a convenient way to avoid repossession.


How Your Credit Score Works

Three different credit reporting bureaus assign you a credit score, and your score can vary a bit from bureau to bureau. They use the same criteria, though, and there shouldn’t be a drastic variation. It’s highly unlikely you would have a score of 720 with one bureau and 550 with another.

The factor that plays the largest role in your credit score is your bill payment history, with credit card bill payments being most significant. The next-largest factor is your credit utilization, or how much of your available credit you use at any one time.

The final three factors are how long you’ve had your credit accounts, how diverse your types of debt are and if you’ve made any recent applications for new credit, but these all have much smaller effects on your score.


How a Title Loan Can Affect Your Credit Score

Now that you know the factors that contribute to your credit score, you can likely answer do title loans go on your credit and in what way. Your title loan can affect your payment history for better or worse.

As we mentioned, credit cards are what count the most when it comes to your payment history. In general, unsecured lines of credit and loans tend to have more of an effect than secured lines of credit and loans, since the latter are tied to property. This means that your title loan certainly won’t have as much of an effect on your credit score as your payment history on a credit card would.

Making your title loan payment on time, even if it’s just to extend it, can have a positive effect on your credit score since it shows good payment history. If you’re looking to improve your credit, then a title loan can help. Just keep in mind that it won’t make a drastic difference. You could see your score increase a bit, but it’s not going to take you all the way from a bad credit score to a good one.

You also need to remember that you can damage your credit score further by failing to pay a title loan. If you default on the title loan, then the title loan company can report that and it will decrease your score. Of course, the other drawback is that the title loan company can repossess your car because of the default, and then sell it.

If you’re looking for car repo help after a title loan company has taken your car, you can usually get your car back if you pay what you owe, although you may also need to pay for any additional repossession and storage fees that the lender incurred. It’s better to communicate with your lender in advance and extend your loan to avoid this issue entirely.


Finding a Title Loan Company

If you were wondering do title loans go on your credit because you wanted to use one to boost your score, then it is one option. Using a credit card responsibly is a more effective way to increase your credit score, but that requires the card issuer to approve you, and actually receiving the card can take time. A title loan is something you can usually get the same day that you apply for it, and it may not even take an hour.

It’s also easy to find a lender in your area with our Texas title loan apps. You can go to our online application by clicking Apply on the header menu, and then you’re just a few pieces of information away from getting connected with a title loan company in your area.