During your search for a loan, one of the concerns you might have is: will a title loan effect my credit score?
While this is a valid thought, it’s a reality of any loan you might be after. Taking out an auto title loan can have a positive or negative impact on credit history, but the effects are mainly influenced by the choices of you as a borrower of a ChoiceCash Title Loan!
How Does Applying for a Title Loan Affect My Credit Score?
An auto title loan is a type of secured loan, and the security comes from using your title as collateral for the loan. Since collateral is used to secure the loan, it can be much more flexible in the approval process and those from all credit backgrounds can potentially receive approval.1
However, when applying for any loan, a lender will often perform two different kinds of credit checks.
- A Hard Credit Check: This can potentially lower an applicant’s credit score up to five points. A loan representative will inform you ahead of time if a hard credit check will need to be performed.
- A Soft Credit Check: This is done during your initial loan inquiry and does not affect your credit score at all. This is generally for borrowers to prequalify your collateral and your finances during the initial loan form. If you do not pass a soft credit pull, you will not be considered eligible for the loan.
How Does Taking out a ChoiceCash Title Loan Affect My Credit Score?
As a borrower, taking out an auto title loan begins the repayment process for the loan, which can affect your credit. Whether or not it will negatively or positively affect your credit can often be up to a few different factors:
- Your Existing Debt or Credit Utilization: When taking out a loan, one factor to consider is your existing credit utilization. If your credit utilization is higher, getting another loan can impact your open credit ratio, as it will increase your utilization.
- Your Responsibility as a Borrower: Neglecting or defaulting on your payments can negatively affect your credit. If the car title loan is not paid back in a timely manner, then the loan will eventually default. When this happens, some auto title loan lenders will report the default to the major credit bureaus, which could potentially have an impact on a borrower’s credit in a negative way. However, this can be avoided by enrolling in auto pay and making on time payments on your ChoiceCash Title Loan.
- Timely Payments: The best thing you can do for your credit is make your payments on time! Part of what contributes to credit history is having no missed payments, and being a responsible borrower can help reflect positively on your credit report.
Can I Still Get a ChoiceCash Title Loan with Bad Credit?
If your credit is less than ideal, you will often be turned down for traditional loans due to you credit history. While this can be financially stressful, your credit score is not as important in the approval process for a title loan. Instead, these two factors matter most during the loan approval process:
- Your Ability to Repay the Loan: Whether this is proof of income or alternative income, all borrowers need to show the ability to financially afford the loan.
- The Value of the Collateral: This factor is most essential in the approval and funding process. Your collateral’s value and equity will determine how much funding is available. Generally, you can receive anywhere from 25% to 75% of your vehicle’s value, depending on your ability to repay the loan.
Regardless of your credit, a title loan can still be in your reach!1
What are the Requirements for a ChoiceCash Title Loan?
While perfect credit is not a requirement for ChoiceCash Title Loans, there are some requirements that should be met ahead of time for a borrower to qualify for a loan. While the exact requirements may vary from state to state, generally they are:
- Borrowers Must Have Proof of Income or Alternative Income
- Borrowers Must Have a Title in Their Name
- Borrowers Must Be At Least 18 Years of Age
Getting Started on a Title Loan
If a title loan through ChoiceCash Title Loans is the right option for your finances, getting started is much easier than you might think. Borrowers can choose between a few different ways to begin the loan process:
- Filling out a short inquiry form online to get prequalified.
- Calling a loan representative directly at 855-422-7402.
Whichever way you choose, getting approved will mean getting your funds in as little as one business day!1