After being turned down for a loan by a big bank, customers might find that an online car title loan with a non-traditional lender is a great solution for their situation. At LoanMart, we strive to help people secure the money they need as quickly as possible.
We also care about the customers we serve, and weâre interested in promoting knowledge and responsibility when it comes to finances. That means we want to help borrowers understand money and credit.
Itâs important to know why credit scores are relevant â and how to read it. Before shopping around for an online car title loan, itâs important to understand all there is to know about credit scores.
Understanding What Goes into A Credit Score
There are a few different factors that go into determining a credit score. These are:
- Payment history
- The age of credit history
- What types of credit
- Â How much is owed on any of the lines of credit
Letâs look at each of these factors in a little bit more detail to properly read and understand credit scores:
Payment History
Payment history makes up a huge part of a personâs credit score, more so than any other one factor. âPayment historyâ refers to payments they have made â or havenât made â in the past.
If all payments have been made on time and in full, this will improve an individualâs score. Late payments could hurt an individualâs score, especially if itâs happened recently.
Credit History
The age of an individualâs credit history also plays a part in determining their score. If an individual hasnât had credit for very long, they wonât have the same track record of using credit appropriately when compared to someone with a longer credit history. The good news is, the longer an individual has credit, the better their score will get. Thatâs why itâs important for borrowers not to close their oldest account â itâs helping their score the most!
How Much is Owed
This one is pretty straightforward â if an individual owes money (in other words, if there is debt), an individualâs credit score is negatively affected. Borrowers should do their best to pay off balances and not utilize all the credit they have available if they want to improve their score here.
Types of Credit
This often makes up about 10% of an individualâs score, if the credit agency doesnât have additional information about a person and their credit. This means that if they know about an individualâs credit and payment history along with how much that is owed, the type of credit they have doesnât count for as much.
