6 Ways a Car Title Loan Can Protect Your Credit Score

Car Title Loans Can Protect Credit Scores

Your credit score is at the mercy of others, but you play a significant role in the fate of your credit score. Almost every financial transaction you make regarding your personal finances from paying your electric bill to using your credit card has an impact on your credit score.

There are many reasons why your credit score may be low, but they mostly come down to not paying what you owe others, the amount of credit you have out in your name, and the amount of debt you currently are carrying.

It is controversial to say a car title loan can help your bad credit. Title loans are a modern lending solution which allows you to tap into the value of your car or truck as collateral for a short term loan. These types of loans are often maligned due to the interest rates associated with them. Title loans are meant to be taken out for a short period of time.

A title loan can help protect your credit and help repair your credit if used appropriately.

1. Prevent delinquencies - Nothing feels as bad as not being able to pay bills when they are due. Falling behind on utility bills is common, especially when living paycheck to paycheck. A title loan can provide you with the money you need to keep yourself from falling behind on paying your bills, rent, or mortgage.

2. Paying off city fines - Many people don't realize the newest weapon in cities' effort to collect on parking tickets, library late fees, and other services is to send the unpaid tickets and fines to collection. A $30 parking ticket is no longer a nuisance but something that is having a negative impact on your credit. The problem with fines and tickets is you never budget for them. They will also come as a surprise and coming up with the money to pay them sometimes means sacrificing something else. A title loan can once again save your credit by giving you the money to pay your fines.

3. Preventing charge-offs - When you go too long without paying a debt, the issuer of the debt may just charge it off, take it as a loss. This is a huge blow to your credit as it is a sign you don't ever pay back what you borrow. Unfortunately, you probably are in a situation where you can't pay it back, even though you want to and with this delinquency on record, getting another loan to correct this situation is impossible. The title loan you get through Chicago Car Title Loans does not require a credit check to be approved. Even though you are in dire straits, you have an option available to you.

4. Cash without credit - As mentioned earlier, each line of credit you open affects your credit score. Taking out a traditional loan will show up on your credit history which could have a negative impact if you already have too much debt. A title loan through Chicago Car Title Loans is not reported to the credit agencies and thus has no affect on your credit score. If your credit score is sterling and you want to keep it that way but still need to borrow money, consider using our title loan services to get the money you need.

5. Borrow money even with a bankruptcy - You've already gone through the trying and heartbreaking steps of filing for bankruptcy and now you have this black mark on your credit report which is preventing you from borrowing any money. When an emergency comes up and you need to borrow, you can still get access to cash through a title loan.

6. Settle debts before judgements - Worse than bankruptcies is having a court rule against you in regards to debt. This element on your credit history shows the creditor had to go to extraordinary lengths to collect on the debt. Before your debt reaches this point, you can use an auto title loan to borrow money and pay off the debt.

Nothing can replace active payment and personal financial management as a way to protect your credit score. When you get caught in a vicious cycle of debt, you sometimes feel such despair you stop caring. Don't let that happen. Call your creditors. One of the worst things you can do is become uncommunicative. The companies you owe money to want their money and don't want to go to through the paperwork needed to send your account to collections just to get pennies on the dollar.

When you can't make payments, call. Communicate. Make sure they know you are willing even if you aren't able. We understand your struggle and want to help. Getting a quote on the value of your car or truck is absolutely free. You can fill out the application and get an instant free quote just to see if you are able to get enough money to help you.

Our friendly and knowledgeable loan specialists are waiting to assist!

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PremiumLoans may act as the broker for the loan, and may not be the direct lender.
All loan applications are subject to meeting our credit criteria, which includes providing acceptable property as collateral. Consumers need to demonstrate ability to repay the loan.
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