The term “credit” refers to your ability to borrow money from banks, credit unions, and other lenders. Having good credit makes it easier for you to get approved for loans to buy a house, finance a car, or even pursue a college education.
You typically need to meet a minimum credit score requirement to qualify for traditional personal loans, mortgages, or other loans. This means if your credit isn’t perfect, you may find it difficult to get approved for these loans. Fortunately, there are other options available.
Imperfect credit title loans are ideal for people who don’t qualify for other types of loans due to their credit. Unlike traditional personal loans, a title loan is a secured loan. To obtain a title loan, you must be willing to use the title to your vehicle as collateral. You won’t lose access to your vehicle, but your lender will hold onto your title or put a lien on it until your loan has been completely paid off.
Before applying for this type of loan, it’s important to understand whether you are eligible and if so, how getting approved will impact your credit. Here’s what you need to know:
Do Title Loan Companies Do Credit Checks?
Like other lenders, title loan companies will perform a credit check on anyone who applies for a loan. Performing a credit check allows the title loan company to review your credit history and evaluate your creditworthiness.
A credit check gives your lender the opportunity to see how well you have managed your debts in the past. The lender will use this information to determine how likely it is that you will repay the money you borrow in the event you are approved for a title loan. The results of this analysis may impact your eligibility for a title loan.
Can I Get a Title Loan With Imperfect credit?
You may need to meet a minimum credit score requirement to qualify for a traditional personal loan. However, title loans are not traditional personal loans, so the eligibility requirements are not the same.
The title loan company will consider your credit when determining your eligibility for a title loan. This isn’t the only factor that will impact your eligibility, though. Title loan companies also consider the value of the vehicle you are using as collateral and your ability to repay the loan. Because your credit isn’t the only factor that determines your eligibility, you may still get approved for a title loan even if your credit isn’t perfect.
Every lender is unique, but in general, title loan companies accept most credit types. This means you may get approved for a title loan even if you don’t qualify for a traditional personal loan as a result of your credit.
Can I Add a Co-Signer to My Title Loan?
It’s much easier to qualify for a title loan than it is to qualify for a traditional personal loan. However, if you don’t qualify for a title loan on your own, you may want to consider adding a co-signer to your application.
A co-signer is someone like a family member, friend, or colleague who is willing to pledge to repay your debt in the event you fail to do so. Co-signing your title loan application makes this individual liable for the debt if you cannot pay it.
Adding a co-signer with good credit will improve your chances of getting approved for a title loan. It can also help you qualify for a lower interest rate, which will reduce the total cost of the loan. If someone in your life is willing to serve as a co-signer, you may want to take advantage of this option to get the best rates possible on your title loan.
Do Title Loan Companies Report to Credit Bureaus?
Credit bureaus, also known as credit reporting agencies, are organizations that collect consumers’ credit information and compile it in credit reports for lenders. The three major credit bureaus in the U.S. are TransUnion, Experian, and Equifax.
Title loan companies report to these credit bureaus, which means if you apply for or take out a title loan, this information will be reflected on your credit report. In other words, taking out a title loan will impact your credit.
How Will a Title Loan Impact My Credit?
Taking out any type of loan, including a title loan, will impact your credit. Initially, a title loan may cause your credit score to take a slight dip. This occurs for two reasons. First, you are taking on more debt, which can negatively impact your score.
Plus, the title loan company will need to check your credit before approving your application. This credit check appears as a hard inquiry on your credit report, which can decrease your score. However, these effects are only temporary, so you shouldn’t let this stop you from getting the money you need to make ends meet.
In the long run, taking out a title loan might actually improve your credit score. This is because the title loan company will report every payment you make on your loan to the credit bureaus. Payment history accounts for about 35% of your credit score, so every payment you make could have a significant impact on your credit. If you make on-time, consistent payments on your title loan, your credit score could improve by the time you pay off your loan.
The opposite is also true. If you miss a payment or make a late payment, this could negatively impact your credit score.
If you want to protect your credit when taking out a title loan, it’s crucial that you never miss or make a late payment. You should also avoid borrowing more than you can afford to repay. By following these rules, you can use your title loan as an opportunity to increase your credit score.
How to Apply for imperfect credit Title Loans
Don’t let a less-than-perfect credit score prevent you from getting the cash you need. Follow these steps to apply for a title loan from LoanCenter:
- Contact our loan officers. Call 1-877-624-7594 to speak to a loan officer directly. You can also reach out to a loan officer by submitting your information using the form on our website.
- Get a free quote. Your loan officer will ask you for some basic information about your vehicle. This information is used to prepare a free quote, which will tell you if you are approved for a title loan, and if so, how much you can borrow and at what interest rate.
- Finish your application. If you’re satisfied with the terms in your quote, finalize your loan by signing and submitting the required documentation. Your loan officer can provide more information about this step in the application process. The sooner you sign and submit the required documentation, the sooner you can the money you have been approved to borrow.
- Get your cash. Your cash will be available shortly after your title loan application is approved. You can either pick up your cash at one of our convenient locations or have it sent to you via check or wire transfer.
The entire application process is simple and straightforward. Contact us now to apply for a title loan so you can get the cash you need as soon as possible.