How Do Miami Car Title Loans Affect Your Credit?

By Author: Stam Bett
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If you have bad credit but you need money to cover important things in life, you probably find yourself in a tough situation: banks won't lend money to you, and you probably don't qualify for a credit card, unless you have one already with available credit. That's when you can turn to car title loans. Miami has dozens of great lenders who will give you the cash you need today, regardless of your credit score, using the equity in your vehicle.

Many people who turn to car title loans in Miami wonder about the impact on their credit. Will paying these loans on time improve your credit? Will the loan ever appear on your credit report? Actually, Miami car title loans won't directly affect your credit, as lenders do not run your credit at all to consider you for a loan. The loan won't be reported to your credit if you pay on time, and your positive payment history won't improve your credit score.

If you default on car title loans, Miami allows lenders to then report the defaulted loan on your credit. This is how a title loan can hurt your credit, just like any loan if you don't pay on time.

Still, you can use ...
... title loans to improve your credit indirectly. While the loan won't appear on your credit, the money you receive can be used to improve your credit report by paying your other bills on time, paying down your balance or even paying the deposit for a secured card.

1. Pay Down Your Accounts
If you carry high balances on credit cards, or even a car loan, it's probably bringing down your credit score. A large percentage of your FICO score is determined by the ratio of available credit to debt, so maxed out cards can be hurting you a lot. Use the cash from Miami car title loans to pay down the balances on your credit accounts to improve your score and enjoy lower interest rates than you probably have on your credit cards.

2. Pay a Deposit for a Secured Card
Secured cards work just like a regular credit card and, unlike prepaid cards, they actually improve your credit with responsible use. These cards do require a deposit to open your account and this refundable deposit is usually equal to your new credit limit.

In most cases, you'll need to pay a deposit of at least $200 to $300 to get your new card, but you'll need to make sure the card is free of other costly fees. Look for an annual fee of less than $35, and no hidden charges like account access fees, monthly maintenance fees and more. If you don't have the money to pay this deposit to begin establishing good credit history, turn to car title loans. Miami has plenty of lenders who will give you the cash you need to get a new secured card, and take care of other bills.

3. Pay Bills to Avoid Late Payments
Finally, the best way to improve your credit with the help of car title loans in Miami is using the loan to pay your credit cards, mortgages, rent and utilities to avoid damage to your credit report. A significant part of your FICO score is payment history, so improve this with the help of your loan if you're afraid of falling behind on any of your credit accounts.

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