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Can a Title Loan Increase Your Credit Score?

home repairs from title loans

If you feel like your credit score is a bit on the low side, you’re not alone.

While the number of people with super prime credit scores (the highest of all) is at an all-time high, that doesn’t show anything about credit score averages. According to Experian, the average American credit score is currently a 675 – the highest since 2012. 675 is on the lower end of good when it comes to credit score ratings, and even that cannot be enough to obtain funding in some instances.

Next comes the question of how to increase your credit score. Just waiting it out until it repairs itself isn’t always enough, as having a good credit score is how most secure housing, additional funding, and reasonable insurance rates. And while making on-time payments to existing credit accounts does eventually help out your credit rating, it does not do it immediately. Unfortunately for borrowers, credit agencies, financial institutions, and banks are not so quick to help out those with poor credit. It is challenging to open up a new account with a company that requires your credit information when you have a low score, which can make repairing credit a long and arduous process. So, how do people increase their credit scores in a short period of time? The answer often comes in the form of a title loan.

Much to many people’s surprise, title loans are a great way to increase your credit score. While they don’t require your credit information, title loan companies do report your payments to credit bureaus. More substantial payments over a shorter period of time show credit unions that you are serious about payments and can handle new financial obligations. Finally, title loans allow you to take out a loan to pay for things you might need to pay for without falling behind on payments. Opening up a new account, such as a title loan account with Midwest Title Loans in Kansas and Missouri, is one such way that you can increase your credit score relatively quickly as well as reaping the benefits.

What Does a Credit Score Do?

Anyone with a credit history has a vague idea of how credit works, but few think about what it really does. Before large banking made its mark on the United States economy, local banks lent based on a person’s assets and merit. Having physical assets made it easier to determine just how wealthy a person was and also lessened the financial blow if that person could, for some reason, no longer to afford to pay a loan back against it. Today, large banks just do not have the time or storage space for everyone’s physical assets, which is why the credit rating system was developed.

Credit scores originated in the 1950s when equality issues in the United States were making waves. Before this, lending was done by individual bankers, which left room for obvious bias. So, credit unions were formed to provide fairer lending grounds for everyone. Today, however, flaws in the credit scoring system are apparent. They show a score based on standardized components, like on-time payments and amount of credit accounts open. What they fail to take into account is individuality. Whereas one person with a good credit history might have one or two missed payments but a high score, someone else might have a lower rating because of high credit card balances but an otherwise flawless record.

It is easy to see how so many people get upset by credit union scores, which is why title loans are one great option to build up or rebuild your credit score.

Title Loan Basics

A title loan is a loan that a person gets based on the worth of their vehicle at the time of inspection. Those looking for a title loan bring their car into a title loan lender, and the lender will evaluate the vehicle before making an offer. Whereas banks, credit unions, and other financial institutions lend based on credit, title loan lenders lend based on the physical asset of a car’s title. They hold on to the title until you pay back the amount they lend you against your car.

A similar way to think about the title loan lending process would be to imagine you are remortgaging your house. While you still live in your home, your bank technically owns the house until you repay the mortgage. If you cannot pay your mortgage, the bank does take ownership of the house. However, with continued on-time payments the house eventually reverts to your ownership.

Lending Stipulations

Each title loan establishment has its own rules about lending. Therefore, it is worth it to ask about the standards of lending prior to making any pre-loan commitments. In other words, don’t put the cart before the horse, especially when it comes to your financial well-being. To take out a title loan with Midwest title loans, the potential customer must meet the following standards.

  • You must own the car outright. A car with a lien on the title means that someone else officially owns your car. While many title loan companies will lend with a lien on the title, we believe it is in the best interest for our customers to own their cars outright.
  • You must be 18 or older.
  • You must bring a valid driver’s license with you at the time of application in one of our branches.
  • The car must be in working order.

Are you looking for an easy and effective way to rebuild your credit? Consider taking out a title loan and making short-term monthly payments to increase your credit score. Your credit score doesn’t matter – we’ll lend to you regardless of your credit history. Midwest Title Loans has branches in Kansas City, Gladstone, and St. Joseph, Missouri as well as Overland Park and Kansas City, Kansas. Applying and receiving a loan takes as little as twenty minutes, and you get to drive away with your car and the cash from the loan. Contact us for more information or to make an appointment to meet with one of our loan specialists today.


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330 W. 85th Street
Kansas City, MO 64114
Phone: (816) 363-8600
M-F: 10:00am – 6:00pm
Sa: 8:00am – 1:00pm

6420 North Oak Trfwy
Gladstone, MO 64118
Phone: (816) 436-7711
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Sa: 9:00am – 2:00pm

8212 Metcalf Ave.
Overland Park, KS 66204
Phone: (913) 381-2222
M-F: 10:00am – 6:00pm
Sa: 9:00am – 2:00pm

2500 State Ave.
Kansas City, KS 66102
Phone: (913) 281-9997
M-F: 10:00am – 6:00pm
Sa: 9:00am – 2:00pm