There are many reasons why you may have fallen behind on your credit card bills. For example, the average American was expected to spend over $600 in the 2011 holiday season. Also, sometimes a major repair is needed for a vehicle or a home or maybe there was an unexpected medical bill. In any case, you now have a large credit card bill to pay off.
If you have the money to pay your bill - great! Otherwise, you could find yourself in serious credit trouble quickly.
Let's take a look at what will happen if you get too far behind on your credit card bills and how a title loan can help solve that problem.
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What Will Happen if I Don't Pay My Credit Card Bills on Time?
According to Investopedia, a credit card company will generally report you to the major credit bureaus after 2 consecutive missed payments. This happens 30 days after the bill was originally due, as you have technically missed your first payment if it is a day late and the second payment after 30 days.
After a credit card company reports your bill as 30 days late, your credit score will drop, according to Investopedia. After the third missed payment (30 days later), your score could drop as much as 125 points, according to the site.
What all this means for you is that you will have a more difficult time obtaining credit in the future. Whether you want to take out an auto loan, home loan or just sign up for another credit card, you may be turned down in the future because of your lower credit score. Even if you qualify for a loan or credit card, you'll get a higher rate of interest, meaning that you'll pay more than you would have before your score dropped.
Also, negative information on your credit report can be viewed by your current or future employer. The employer must obtain your permission to do so, but may choose not to hire you if you refuse to allow them to look at your credit report. Once they look at your report, they may frown upon negative information and it could jeopardize your chances at getting a job.
Note that information tends to stay on credit reports for about 7 years, so there is little you can do once your credit card company notifies the credit report of your missed payments. It is important to pay it off as quickly as possible, so a quick source of money could be very helpful.
How a Title Loan Can Help
Taking out a loan to pay off other debt may seem odd. However, think of it as getting an extension on your credit card debt.
A title loan can be obtained quickly and often without a credit check. So, if your credit card company has already reported your late payment, the title loan company probably won't care about that. You'll just need proof that you own your vehicle and they'll lend you money based on the value of that vehicle.
So, let's say that you have $800 in credit card debt that is a month past due. You'll need to come up with some extra money quickly to pay it off and avoid a lower credit score. What can you do?
You can walk into a bank and see if they are willing to give you a loan. Of course, you'll have to fill out a load of paperwork and hope that your credit is good enough to meet their standards. Then, you'll have to wait a few days or even weeks for a decision in many cases - leaving your bill sitting out there, unpaid.
To avoid this, you could skip the bank and go straight to a title loan company. You'll often have a quick decision and walk out with cash that day. In most cases, you'll also keep your vehicle while you pay back the loan. You'll be able to pay off your bill quickly and avoid credit trouble by doing so.
Conclusion
A title loan can be a great tool for paying off a credit card bill quickly. Just remember to keep current with your payments on the title loan to avoid further issues!
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