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A car title loan might be just the ticket when you need to get your hands on some quick cash. Even better, you can usually get a car title loan, regardless of your credit history. You just need to show a stable income and a car with some value. It’s true, in most cases, your credit score won’t matter. On the other hand, however, this point probably begs the question: do title loans improve your credit score?
How Securities Lending Works
In exchange for a short-term loan, lenders accept the title of a vehicle as collateral. It can be a car, a truck, a motorcycle or even an RV. All you have to do is verify your identity, provide documents confirming your place of residence and show that your income allows you to repay the loan. You will also need to help the lender verify the car’s value and provide the vehicle’s title deeds. In situations where you own the vehicle with another person, that person will need to provide similar data. You must also bring the automobile to the loan office or provide photographs with which a lender can determine the overall condition of the car. The lender will review the information you provide and check the value of the car to decide whether to fund the loan – and for how much. You can get an idea of the value of your car before applying for a loan by using a title loan calculator.
Credit checks are not required
Because you’re pledging your car title as collateral, lenders don’t usually do credit checks. This can be a real advantage for people who have had credit problems in the past, but are now in a better position. Also, since credit checks are not performed, your credit score will often not be affected by applying for a title loan. This is in direct contrast to banks, credit unions, and finance companies, which regularly perform credit checks as part of the decision-making process. Many people are surprised to learn that a lender performing a credit check can lower your credit score. Indeed, one of the factors that enter into its calculation is whether you have recently applied for new credit. On the other hand, securities lenders generally do not report their activities to credit monitoring agencies. So while applying for a title loan won’t hurt your credit, paying one back on time, and according to the terms of the agreement, won’t really benefit your credit score either. So when performing a search for “car title loans near me“You can rest assured that your credit rating won’t suffer when you apply for financing. However, non-compliance with the obligation and the repossession of the vehicle as a pledge could be reported to the offices. This will then be reflected in your credit score. And you will lose your car too.
Securities lending and credit ratings
One of the main advantages of car title loans is that they can be obtained regardless of an individual’s credit history. Having good credit, bad credit, or even no credit is generally irrelevant to the process. All you need is a car with some value to get a title loan. That’s the advantage. But, if you are considering getting a title loan in hopes of improve your credit score, you’d better go another way. Overall, a car title loan has no effect on your credit score. Again, this assumes you pay, rather than defaulting and having your car taken away. Of course, it’s safe to say that the title loan had no effect on your credit score, even in this regard. Rather than the loan itself, it is the non-payment that drives the activity.