Does a Title Car Loan Affect Your Credit Score (2024)

Getting a title car loan won't leave too much of a lasting effect on your credit score. When you get a car title loan, you are getting a secured loan where you put an asset, your car in this case, up as collateral. These loans are different than unsecured loans in terms of your credit. Those loans need credit checks, and you need high credit scores to get more money. With a car title loan, you don't need credit at all. There are no credit checks when it comes to a car title loan. Since you are borrowing money off of your car, it really doesn't matter about your credit history. Because of this, people with poor credit histories often use this way to get money since they can't get money from a bank. With an unsecured, high risk loan, that goes on your credit score as debt. With a car title loan, since you are using an asset as your line of credit, you don't get to put that as debt on your credit score. Whenever you pay off a loan, your credit score goes up. However, a car title loan won't effect your score for the better by that much. Paying off loans quickly are often great ways to raise your credit score in a hurry, however it won't be this way with a car title loan. The good news is that since that this is an auto loan without a credit check, you won't have it effected in a negative fashion. The more important risk with a title loan is potentially losing your car if you default, which means the credit rating might have been the least of your problems.

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