There are many unfortunate happenings in life that call for quick cash and urgent attention. These are situations where a car title loan can you help save the situation. If you need money quick but have a low credit score, one option is to get an emergency fund is through a car title loan.
There are many reasons why you may have a low credit score and some of these reasons include failure to meet up a loan or mortgage payments or credit card dues as scheduled, bankruptcy, accidents, or even living beyond your means. Two more common reasons for a low credit score are reporting errors and identity theft.
These unfortunate circumstances occur not because of your inability to make timely loan repayments, but because of common human error. peradventure you do not get approved for a traditional loan, it is sometimes because of a poor rating.
If you’re not sure about how your credit rating took a dive, you can submit a request for your credit report from the three main credit bureaus. The bureaus offer free yearly credit reports that you can request to keep track of your score.
Go through your report carefully to check for human or any other errors. Under the Fair Credit Reporting Act (FCRA), you have the right to request to correct inaccurate information on your report.
In order to do this, you have to write and send letters directly to the agency and the creditor pointing the incorrect information. But this can take few months, or even years, to get errors solved or amended from a credit report, so be prepared for a potentially hard and frustrating process.
While you’re taking steps to get errors in your score rectified, look for other options such as a car title loan that offers a reasonable rate of interest. Repaying them on schedule can help you improve a poor credit score.
You can obtain a car title loan quickly by using your car title as the collateral to secure the loan. They are subprime loans because they are approved to high-risk borrowers, but in a pinch, you can often get your cash in hand in a matter of few hours.
Car title loan can rebuild your credit score
The advantage with taking car title loans is that you get to keep and drive your car while repaying the loan. So, taking one will not affect your lifestyle in any way, just that you have to submit your car title as collateral and manage your budget in order to re-repay the debt on schedule.
Since credit bureaus give more importance to recent activity than to past history, repaying a debt on time will demonstrate the ability to manage your finances responsibly. If you have a solid plan to make payments diligently and on schedule, as agreed, you can establish a positive payment record that will reflect well on your credit score.
To use a car title loan to reestablish credit, its best to take a short-term loan with a lender that offers affordable interest rates, so that you can be paying the least amount of interest over the loan term. Also get a lender that has no pre-payment penalties so you can repay earlier if possible.