When you ask the question, “do car title loans affect your credit?” The answer will likely be a 50/50 split between yes and no. Some will tell you that all credit use will affect your credit score, while others will say that secured loans do not impact your score.
The truth is closer to the former. Using title loans or any credit will influence your credit score, but how much depends to a significant degree on your repayment plan. Whenever you use credit wisely and repay it in accordance with the terms, not late and in many cases, not too early, your score will move upward. When you use too much credit, then your debt-to-earnings ratio will become off balance, and your score will spiral downward.
Whenever your monthly payments are more than 40-50 percent of your earnings, it will negatively impact your score. You should also consider the 28/36 debt-to-earnings rule, which states a family should spend no more than 28 percent of their monthly income on expenses for the house, with a maximum of 36 percent of total debt. Therefore, you should use all credit wisely, even title loans when necessary.
Using Title Loans Wisely
Many people believe it is unwise to use title loans. However, that is not necessarily true. Suppose your mortgage is due and you are waiting for a check to clear. Or, you have other significant payments due and your waiting for a program payment. You could use a title loan to get money to make those payments and protect your credit rating.
Title loans could be the assistance you need to resolve a financial emergency. Habitual use of title loans is probably a sign you need to manage your finances better. Always make sure your use of credit will help, not hinder your financial situation. Even if a title loan only has a minimal effect on your credit, it does affect your budget. Always check the terms before you agree to a payment plan, and if it will negatively affect your ability to manage your budget, keep looking.
Get Help from Advantage Finance, LLC
Advantage Finance could be the help you need to avert a financial emergency. Title loans are not always the answer, but they can be a valuable source of money when you need it. And, these are significantly better than a payday loan with an automatically debited payment. With a title loan, you have more control.
Email us your questions,firstname.lastname@example.org, or use the convenient contact form to apply for the money you need, today.