Are Auto Title Payments Reported?
So you’ve decided that securing an auto title loan to access funds quickly is the route you want to go. Many questions may enter your mind and one of those is whether or not your monthly loan payments will be reported to the major credit bureaus. The short answer is that it depends on the lender; however, if you reach out to Transunion or Experian they state that these types of loans will not typically have any effect on your credit rating. Although Equifax has not made any formal updates if this will occur.
There’s two ways you can look at this. For one, if the auto title lending company isn’t going to review your credit score, you don’t have to worry about having your score affected by a credit inquiry. That’s really good news if you’re getting many quotes from multiple lenders. On the other hands, if you’re looking at improving your FICO score you have to consider that the monthly payments you’re making to pay back your loan is not being reported, so you lose out on the opportunity to improve your credit score.
So what does an car title loan lender look for if they aren’t looking at your credit score? First and foremost is they look at the value of your car, are you employed (or proof of income) and your bank details. The vast majority of lenders will not check your credit rating, but before you get a quote from them you should verify.
So those are the primary details for qualifying for an auto title loan. Some lenders may report timely payments of your loan, but don’t count on it. However, you should be aware that any missed or skipped payments will certainly be reported to the credit bureaus. This will certainly negatively effect your FICO score. So consider this prior to taking out one of these loans. Not only can you hurt your credit rating, but you could also have your means of transportation repossessed.
If you’re on this site and learning about car title loans as an option for you to access funds, you’re most likely already turned down for conventional loans. Whatever your situation is, you probably have a low credit score and you need money quickly. The reason many individuals take out a car title loan is because of this general situation. They understand that they cannot qualify for a traditional loan and that they know that their credit rating is not going to be an issue for qualifying for one of these loans.
Why don’t these lending companies check your credit? The simple answer is that they look at the value of your car because that’s the collateral you’re placing against the loan. If you default on your loan they will repossess your car and sell to it to make back the loan amount. In addition, these loans are really high interest, so they end up being good investments for the lender no matter the outcome of the repayment process.
If one of your goals is to repair your credit during the repayment of one of these loans, you should ask the lender directly if they will report your payments to the credit bureaus. It’s just like anything else in this process – ask questions. Many lenders will allow you to automatically have your payments deducted from your bank account every month. In those situations they may even lower the APR of your loan, and it puts you in a position where you’re less likely to default on your loan.
The lender is not really interested in your credit rating. They are more interested if your vehicle title is clean. Meaning that you don’t have any loans or liens against it. Simply, is the auto title in your name? If the answer is yes, then you’re cooking with gas. Then they’re going to look at the value of your automobile to determine how much they’ll lend to you. Typically you can receive funds of about half the value of your vehicle. Every lending company’s application process is a little different, but this is the main take away. Using your vehicles equity may be a great way for you to access funds quickly when you don’t have traditional methods at your disposal.