Title loans are a type of short-term loan that involves using your vehicle as collateral. While such loans provide a quick and convenient solution when you need cash fast, this question often arises: do title loans go on your credit? Learn about the impact of title loans on your credit score and the benefits of choosing a reputable lender like VIP Title Loans.
How Title Loans Work
Applying for a title loan is fast and easy, with minimal documentation required. The most important part is providing your vehicle’s title, which serves as collateral for the loan. The lender will assess the vehicle and determine a loan amount based on its worth, often around 25 to 50 percent of the total value. Once approved, you receive the loan amount on the spot and must repay it with interest according to the agreed-upon terms.
Do Title Loans Affect Your Credit Score?
Title loans don’t directly impact your credit. Since most title lenders don’t report to the major credit bureaus, the loan shouldn’t appear on your credit report. However, here are a few scenarios where a title loan could affect your credit score:
- Defaulting on the loan: If you fail to repay the loan within the specified repayment period, the lender has the right to repossess your vehicle. Repossessions are reported to the credit bureaus and can negatively impact your credit score.
- Collections: If you default on your loan, and the lender sells your vehicle to recover their losses, you may still owe an outstanding balance. The lender may send this balance to collections, which impacts your credit.
- Late payments: While most title lenders don’t report to credit bureaus, some may choose to report late payments, negatively affecting your credit score.
- Hard credit inquiries: Some title lenders perform a hard credit inquiry when you apply for a loan. This lowers your credit score slightly and remains on your credit report for two years.
Benefits of Choosing VIP Title Loans
VIP Title Loans offers unbeatable savings on title loans throughout the DFW Metroplex. Here are some key advantages of choosing us over other title lenders:
- Lower interest rates: VIP Title Loans offers the lowest interest rates on car title loans in Texas, making it easier to repay the balance.
- Flexible repayment options: Unlike many title loan providers that require lump-sum repayments, we offer flexible terms to accommodate your financial situation.
- No credit check: VIP Title Loans doesn’t perform a credit check during the application process, avoiding a hard credit inquiry on your credit report.
- Superior customer service: Our experienced team will help you understand the loan terms so you can make an informed decision about your finances.
Choosing a reputable title loan provider grants access to competitive rates, flexible terms, and a caring team. You know you’re in good hands with VIP Title Loans! To learn more about us, please call 817-265-2274, fill out our online application form, or visit one of our five convenient locations in the DFW Metroplex.