If you have less than an amazing credit score, or worse you don’t know your score, you may not have thought about improving that bad credit with title loans or a registration loan. You may even wonder how an industry built on debt can help to repair credit, but it can. Do you know how your credit works and what hurts or helps it? Answering some of those questions can easily make the case for title loans.
Credit is a term that loosely means how reliable you have been when repaying debt. Title loans are a lending vehicle built for those who have bad credit, or don’t need a credit check, or who can’t borrow from family or friends, or maybe even no credit, or those who need emergency credit and don’t have time for a traditional lender and all who still need to borrow money. The connection between the two lies in how you build up, and what behavior harms, your credit score.
Your credit, in today’s world, is attached to your name and, most frequently, your social security number. Anytime you pay a bill, rent a home or borrow money, it is reported to credit agencies. If you have never had a bill in your name and never had a credit card, a bank account, or a loan, you likely have little to no credit history. This is also called a thin credit file.
As soon as you have to pay bills—rent, utilities, cell phone, gym membership—you start to build credit. Pay on time, and that gets reported, demonstrating to future lenders that you can be relied on to pay as directed. Pay late and that is also reported.
In the case of loans, a small loan repaid on time shows that you are a good risk. As you prove your reliability, you often get larger amounts offered to you or maybe lower rates.
At any time, you can ruin all that you have built up by defaulting on a loan—not paying at all. Or by paying late or inconsistently to the point the lender ends up taking you to court and even worse getting a judgment against you.
If you need to borrow money with a title loan, we can work with bad credit or no credit and help you rebuild your credit. By using the funds from a loan to keep yourself out of default on a medical bill, being evicted or even repairing your transportation so you can keep going to work you avoid a credit check and stop negative reporting on your creit file. This makes it easier for you to be able to borrow money for a home or other big purchase down the road.