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Will an Auto Title Loan Affect my Credit Score in Tennessee?

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There may be many lending options out there for residents of Tennessee, one of them being auto title loans. Auto title loans are a type of secured loan where the security for the lender comes from the borrower’s vehicle.

Signing up, or even inquiring for any kind of lending, can have an impact on credit score. Obtaining an auto title loan in Tennessee can impact your credit, though whether that impact is negative or positive depends on the circumstance.

Here are the details about how an auto title loan could affect your credit score. Additionally, there is information on a unique kind of title loan lending—ChoiceCash Title Loans serviced by LoanMart!1

Different Ways the Auto Title Loan Process in Tennessee Can Affect Credit

Like any other kind of lending, there are going to be a few steps to go through with the auto loan process in Tennessee. Generally, the auto title loan process comes with five steps.

But there are two crucial circumstances during the title loan process that could affect credit:

1) A Credit Check

Credit, or credit history, may not have a huge impact on a person’s eligibility for an auto title loan. However, this does not mean that a credit check will not be done. A fair number of auto title loan lenders will conduct a credit check on their applicant.

This is simply because a credit check can show how an applicant will handle the loan. With credit checks, there are hard credit checks and soft credit checks. When a hard credit check is done, it can cause a credit score to go down—up to five points—each time.

2) The Lender’s Policies

There are some auto title loan lenders who may report all payment history, including any defaults, to the credit bureaus which may have a negative impact on credit. However, keep in mind that whether this happens it is based on the actions of the borrower. Make sure to keep an open line of communication with the lender, and if any issues arise, be sure to talk to an agent.  

Different Ways Auto Title Loan Repayment Can Affect Credit Score in Tennessee

Repaying an auto title loan is another place where credit can be impacted. Whether the loan will have a positive or negative impact on a borrower’s existing debt may depend on how repayment is handled.

Here are a few ways repayment may impact a person’s credit in Tennessee:

1) The Loan Payments

With an auto title loan, there are going to be monthly payments to keep track of. When these payments are missed, or are late, it can impact the borrower’s credit negatively. On the flipside, if payments are made on time, it can reflect positively on credit.

2) The Borrower’s Existing Credit History

After taking out an auto title loan, it will be added to a credit report if the lender reports to the credit bureau(s). In this case, if a borrower already has existing debt, or a low open credit amount, then getting another loan can have a negative impact on credit. But when building credit, adding an active loan can be positive!

3) Defaulting On the Loan

When a borrower defaults on a loan, it can have a huge negative impact on credit.

The good news regarding this potential negative is that there are many ways to prevent default. Make sure to pay your title loan payment on time each month, either manually or with automatic withdrawals. But most importantly, keep an open line of communication with your lender. If you ever have issues with payment, your loan agent may be able to offer some solutions to the problem, like an extension.

Why Choose a ChoiceCash Title Loan for Funding in Tennessee?

A ChoiceCash Title Loan serviced by LoanMart is a unique kind of title loan. These loans offer borrowers the standard perks of a title loan, along with so much more.

Here are a few reasons to choose a ChoiceCash Title Loan for auto title loan funding in Tennessee:

  • Competitive Interest Rates—ChoiceCash Title Loans always start with highly competitive interest rates.
  • Loan Rewards—With on-time payments, a borrower could earn loan rewards. This could include low payments and interest rates that get lower each month and the ability to borrow more funding in the future!1, 2
  • Transparency—With ChoiceCash Title Loans, a borrower will know exactly what they are getting into. The loan agents are helpful, clear, and honest.
  • Convenience with Every Step—The entire ChoiceCash Title Loan inquiry process can be done from home!
  • Same-Day Funding1—Funding from a ChoiceCash Title Loan could be received in as little as one business day after approval!

To get started with a ChoiceCash Title Loan in Tennessee, head over to the informational web page. There will be a short inquiry form to fill out. Once submitted, a loan agent will contact you and explain the next steps! Get started with fast and easy funding with ChoiceCash Title Loans today!1

When looking for an auto title loan, a person may have some questions about how the process could affect credit. With any kind of loan (including auto title loans), hard credit checks can lower credit scores. As such, it is recommended that the number of hard credit checks a person approves should be limited. On a larger scale—the impact of an auto title loan on credit will largely be based on how the borrower handles their loan.

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