Will an Auto Title Loan Affect My Credit Score in Texas?

 
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Will an Auto Title Loan Affect My Credit Score in Texas?

An auto title loan is a type of secured loan, where the security comes from the borrower’s vehicle. Many people in Texas seek out these loans because they make funding easy, fast, and flexible. One concern that may come up with any kind of lending is how it will affect one’s credit score.

Taking out an auto title loan can have a positive or negative impact on credit history. Here is more information on the different ways an auto title loan can affect credit, and how a unique type of auto title loan known as a ChoiceCash Title Loan, serviced by LoanMart, could help residents of Texas.

How Applying for An Auto Title Loan in Texas Will Affect My Credit Score?

When applying for any kind of loan, sometimes lenders will perform credit checks. A credit check can either be a hard inquiry—which may lower the applicant’s credit score by up to five points—or a soft inquiry—which will not impact the applicant’s credit score.

For auto title loans, although lenders do not base eligibility on credit history alone, in most cases they will do some kind of credit check. When comparing several lenders and applying for lending, keep in mind that each hard credit check may impact credit score.

The convenient thing is that lenders will let you know about credit checks before they conduct them.

How Taking Out An Auto Title Loan Can Affect Credit Score in Texas?

Once an applicant decides to take out an auto title loan, repayment is another part of auto loan lending that can impact credit.

Whether the impact is negative will depend largely on a few factors:

·         The Borrower’s Existing Credit and Debt

One factor that will largely determine the effect of a credit check will be the borrower’s existing credit and the amount of existing debt they have.

This is largely because getting another loan can impact a person’s open credit to debt ratio. For example, if a borrower has a ton of existing debt and little open credit, then the new auto title loan can have a negative impact on their credit. On the other hand, if the auto title loan adds diversity to a person’s credit, or keeps the credit to debt ratio in balance, the impact may reflect positively.

·         How Monthly Payment is Handled

With an auto title loan, a borrower is expected to make loan payments every month. When payments are missed or paid late, it can have a negative impact on credit. On the other hand, making on time payments can have a positive impact.

·         Whether the Loan is Completely Paid Back

If the auto title loan is not paid back on time, then the loan will eventually default. When this happens, some auto title loan lenders will report this information to the major credit bureaus. This can have a huge impact on a borrower’s credit history.

And so, when it comes to the impact of an auto title loan on credit, the type of impact will be largely based on the borrower. Before taking out an auto title loan, a borrower should be confident about affordability, and payment schedule.

Why Choose a ChoiceCash Title Loan for Funding in Texas?

A ChoiceCash Title Loan is a unique type of auto title loan lending. It is available to inquire about in several states, including Texas.

Along with standard benefits of a regular auto title loans, ChoiceCash Title Loans come with all kinds of additional perks:

·         Highly Competitive Interest Rates

With ChoiceCash Title Loans, interest rates are highly competitive. This is especially true when compared to other similar loan types.

·         Transparency and Honesty

When inquiring for a ChoiceCash Title Loan, a borrower will know exactly what they are getting. When it comes to repayment, there are no hidden fees or balloon payments.

·         Loan Rewards

One of the most unique things about ChoiceCash Title Loans is that with steady on-time payments, a borrower can earn loan rewards. These rewards include lower loan payments each month and the ability to borrow more funds in the future1, 2.

·         Flexibility Throughout the Process

With ChoiceCash Title Loans, a borrower will experience flexibility throughout the process. When it comes to the inquiry process, it can be conducted completely online. With repayment, a borrower can have up to 3 years to pay back their loan. If they want to, they can even pay early without any penalties or fees!

To get the ChoiceCash Title Loan process started in Texas, head over the webpage. There will be a short inquiry form to fill out, and then a loan agent will contact you with the next steps. Get started with fast, easy, and flexible funding in Texas today!

When taking out an auto title loan in Texas, there are a few ways that credit can be impacted. When it comes to the inquiry process, the impact on credit may generally be dependent on the number of hard credit checks conducted.

When it comes to repayment, the impact on credit will largely depend on the how the loan is handled. One place to start when looking for an auto title loan in Texas, is with ChoiceCash Title Loans, serviced by LoanMart.

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