We all know that having a high credit score is important when it comes to getting a loan. It’s critical to have a good to excellent FICO score if you’re applying for any type of mortgage financing or even an unsecured bank loan. When it comes to title loans online, creditors and underwriters will look at far more important things then your credit report. Let’s get into the different scenarios and why it’s not really important to have a good credit score when you apply for an online title loan in Arizona.
Most consumers come to our site and think the most important qualifying aspect they bring to the table is their overall creditworthiness. It’s important to have a good credit score, but that factor is going to help you more when you apply for traditional funding methods like a personal loan. On the flip side, a car title loan company wants to see that you have sufficient equity in your vehicle. With an online title loan, a borrower is using their pink slip as collateral. They’re going to the lender and saying, if I fall behind on this loan you can repossess my vehicle. That’s why its so important for the borrower to never fall behind. It’s also important for the lender to make sure you have enough equity or collateral if the worst case scenario does in fact happen. Typically a title loan lender will repossess your vehicle if you fall behind on a payment or two. That doesn’t mean you lose your car forever. Contact the company and let them know you understand your rights as an Arizona resident.
Good credit is important when applying for most traditional loans
Another thing that local lenders here in Arizona look for is whether or not you can pay back the loan. An auto title loan does come with the backing of a vehicle’s pink slip. So if you ever miss a payment or run the risk of a repossession, the original lender may still be able to sell the vehicle. By doing this they can recoup the original amount they lent out. Companies still want to make sure this step doesn’t happen. It’s costly and time consuming to repossess a vehicle and they often need to wait 30 days until it can be brought to auction. Unlike a credit card debt or payday loan, the direct lender has strict rules which must be followed when it comes to a repossession and auto sale. Most title loan companies will want to know and verify your current employment history. Some firms will verify your current take home pay and go through your monthly budget to ensure you have enough to make monthly payment. We know of other Phoenix based companies who will call references and they may even call your boss or HR department. There are laws in place by the State of Arizona to protect consumers information. Most reputable short term lenders registered in Arizona will follow these regulations and inform you of your rights as a consumer. But you always need to be careful and know the company you’re working with.
Even though you don’t need good credit to get approved for an Arizona title loan that doesn’t mean you can have terrible credit and still get funded. Most applicants with a current bankruptcy will be rejected for obvious reasons. Also, you will probably have trouble getting approved if you have multiple title loan defaults in the past. Some companies that offer title loans in Phoenix use third party credit check services. These aren’t like Equifax and Experian. Instead these services will check proprietary databases for fraudulent behavior or other issues that a lender may see as concerning. Ask your lender exactly what their credit check process consists of before you move forward with an application.