Do you have a history of defaulting on loan payments? If you need cash to establish a positive payment history but have bad credit, you’re probably caught in a frustrating loop. With traditional lending options close to you, there are very few options where you can get the cash to help you improve your FICO score.
A low score results from a poor history of paying debts in a timely fashion. The three credit bureaus that most lenders report to are Equifax, Experian, and TransUnion. They keep records of your credit history and consider the trend of a person’s credit history when evaluating risk, with the more recent trend being given greater importance. So, it’s never too late to start borrowing cash and budgeting wisely.
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Car Title Loans
Car title loans are convenient, quick, and can help you improve your credit rating. Because the debt is secured by auto equity, lenders can afford to lend to customers who are considered high risk. In most cases, all you need is a car title, also known as a pink slip, to get immediate approval.
When paid off according to the repayment schedule, a car title loan can start a trend of good credit history on your credit report and boost your FICO score. Car title loan lenders can provide you with flexible monthly repayment terms at an affordable monthly payment, which may reestablish your credit. Here’s how you can pull this off.
You can also read: Choosing The Right Car Payment
A low FICO score is not a factor for approval in getting a title loan since you will offer your car title as collateral to the lender. You should get approval within minutes and, if you have all the documentation required, you could have cash in hand in hours.
The lender will give you about 25 to 50 percent of your car’s value as a loan. The best way to use this cash is to pay off pending payments that affect your FICO score, such as mortgage payments.
How to Make Payments for Car Title Loans?
If you want to use your loan to reestablish credit, a short-term loan is your best option. Whether you need to cut down on monthly expenses, live more simply or sell stuff you don’t need, you need a plan and some budgeting skills to repay the loan on time.
If you plan to pay back car title loans over a period of months, there are several ways you can make monthly payments for your loans. You can almost always pay by check, either over the phone or through the mail. Some lenders also accept in-person payments at local payment centers as well.
If you have a hard time keeping track of when bills must be paid, regularly scheduled debits from a bank account or paycheck can help you establish a payment routine. This will help you save on late fees and extra interest payments and make your payments more consistent.
If you have bad credit, it does not mean you got a life sentence. There are several ways you can improve your FICO score, including using car title loans to demonstrate a positive payment history by responsible handling of funds.