title loans and credit score

Do Title Loans Help Or Hurt Your Credit?

Title loans are an alternative borrowing option that can give you a quick infusion of cash when you need it most. Of course, any borrowing option comes with risks, and one of the most common questions is whether title loans are detrimental to your credit.

Generally, car title loans will not affect your credit unless the vehicle is repossessed, an action that must be reported to the credit bureaus. Otherwise, your borrowing decision will not negatively impact your credit in the future.

If you’re responsible when taking out a loan and avoid the worst-case scenario, lenders don’t usually report the loan to any credit bureaus. It’s just between you and them. In this article, we’ll dive into how loans affect your credit and whether they’re worth considering in tough times.

What Are Title Loans?

Vehicle title loans use your car’s title as collateral to secure the loan. In other words, you’re borrowing money against the value of your vehicle. Because lenders recognize your commitment to repaying the loan—you’re putting a valuable asset at risk—they usually don’t require any kind of credit check, although some may require proof of income.

do title loans help or hurt credit

Do Title Loans Affect My Credit?

Not typically, title loans do not affect credit scores since lenders don’t report loans to credit bureaus. Some do, however, depending on state laws regarding title loan policies, so the best way to check whether a loan will affect your credit is to ask the lender directly whether they will report your loan to any credit bureaus.

They’re obligated to provide you with an accurate picture of how they use your financial information and whether they need to file a credit report. Lenders don’t usually offload the debt to a collection agency, something that can and will detrimentally affect your credit score.

The bottom line is that you should be financially responsible when you’re taking out a title loan. Repay it just as you would any of your other bills—on time and in full—to avoid any negative stain on your credit.

Why Not Getting A Loan Might Be A Problem

In dire situations, you may be weighing the consequences of whether a title loan or nonpayment is the lesser of two evils. While title loans are a short-term cashflow option designed to give you a quick boost in cash, they’re not to be used frivolously. However, if you have emergency repairs, medical bills, business travel, or other unplanned expenses, a title loan might be a worthwhile option to think about.

Car repair shops, hospitals, and other emergency service providers can and will offload your debt to a collection agency, who will levy nasty fees against you and are obligated to report the unpaid debt to a credit bureau, negatively impacting your credit score.

In these situations, it might be better to take out a title loan to tackle those emergency expenses and services head-on. Doing so not only puts you in a better position financially, but it also gives you peace of mind knowing that your bills are all taken care of.

How We Can Help

Carolina Title Loans, Inc. can help you recover from an emergency by offering title loans of up to $15,000. To get started, you’ll need to make sure you have the following:

  • Your ID, such as a driver’s license or passport
  • Your lien-free title, as proof of collateral
  • Your car itself, for a brief inspection

title loan cash for car title

Ready to go? Here’s how you can take out one of our loans:

  1. Give us a call or complete the title loans request form online.
  2. Wait for a representative’s call and schedule an appointment. We come to you if you’d prefer not to head to the store.
  3. Meet with the representative and bring along your necessary items. Remember, that’s your ID, lien-free vehicle title, and your car itself for our associate to inspect. This process usually takes a few minutes before you’ll know if you’re approved.
  4. If you get approved, you’ll sign some closing paperwork and get the money deposited in your bank account the same day or the next business day.

Submit An Inquiry Today!

Contrary to popular belief, title loans do not harm credit; in fact, they may be a sensible option to avoid hurting your credit by giving you the cash you need to pay your unplanned expenses on time. Emergencies can come out of the woodwork, and when they do, you can certainly consider a loan knowing that it won’t affect your credit if you are responsible with its use.

Carolina Title Loans, Inc. makes the process of getting a loan simple; just reach out to us, and we’ll guide you through the rest of the quick process to get your loan money as soon as the same day.

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.

June Mckaig

June Mckaig writes articles on finance and budgeting, hoping to provide insight amidst the overwhelming crowds of information on the internet. She feels that with all this accessibility comes a lot of false data, and she would like to contribute astute, helpful input that she knows can help others. If you would like to learn more about June's research, read more here.