When It's Okay to Let Your Credit Score Drop
It’s okay to let your credit score drop when you need to use debt relief programs, close excess credit cards, apply for a new credit card or loan, cover essential expenses, or when an emergency happens.
Although your credit score is critical for applying for new bank loans or a mortgage, letting your credit score drop is not always the end of the world and may even be advantageous.
Read on to learn about these five situations when a dip in your credit score is alright. We also show you how title loans online can help you avoid harming your credit whenever possible.
When Is It Okay to Let Your Credit Score Drop?
Filing for Debt Relief
If you’re drowning in debt, letting your credit score drop when you use a debt relief program may be the only way to seize financial freedom. After filing for a balance transfer, debt settlement, or bankruptcy, you can work to rebuild your credit from a place of better financial stability.
Closing Credit Cards
Because closing a credit card results in a dip in your credit score, financial experts generally recommend against closing any of your credit cards, even if you don’t use them.
But if you struggle with overspending due to the number of cards you have, it is well worth the credit score drop to save yourself from being overburdened by debt. If you’re not looking to apply for a loan or mortgage any time soon, your credit score can probably afford the hit.
Applying for New Credit
Sometimes, accepting a lower credit score is a necessary step on the path towards meeting your financial goals. Applying for new credit cards or loans causes your credit score to take a hit, but sometimes it’s worth it to get that great rewards card or a loan for your new business.
Although these options may set you back financially or drop your score in the short term, they also enable you to improve your finances in the long run.
Falling Behind on Essential Expenses
If bills for essentials like rent and utilities are piling up, you may need to fall back on your credit to find help.
Financial experts recommend keeping your credit balance under 30% of your limit, but spending a little extra in one month won’t hurt your credit score in the long run once you pay it off.
Just make sure you’ll be able to make the minimum payments on your credit cards before they are overdue.
At that point, you’ll face late fees and a massive hit to your credit score. A failure to keep up with payments will take about seven years to fall off your credit report entirely.
Facing An Emergency
Emergencies often bring sudden extreme costs, like home and car repair expenses or medical bills. They may even be the reason you’ve fallen behind on paying for essential expenses.
Like when you are struggling to afford essentials, it may be preferable to accept a credit score drop to cover the costs of an emergency. Again, you’ll want to be sure you can pay off your new credit balance on time. Otherwise, you may wind up in even more financial trouble.
If you feel you absolutely cannot sacrifice your credit score to handle your emergency or essential expenses, consider getting online loans for your car title from Tennessee Title Loans, Inc.
How Title Loans Can Help
To get a title loan, you use the lien-free title of your car, truck, or van as collateral for a loan worth up to $2,500. Tennessee Title Loans, Inc. welcomes all income and credit types and will not report your loan to credit agencies, which keeps your credit score intact.
Follow these six simple steps to get the process of acquiring your loan from Tennessee Title Loans, Inc. started today:
- Go to Tennessee Title Loans, Inc.
- Fill out the quick and easy online form.
- A representative from the nearest Tennessee Title Loans, Inc. location will call you to schedule a vehicle inspection.
- Bring your driver’s license or state ID, lien-free title, and vehicle to that store.
- A representative will inspect your vehicle to determine if you qualify and what amount you will receive.
- Drive away that same day with your vehicle and the cash you need.
Tennessee Title Loans, Inc. makes the title loan process painless, allowing you to get the money you need in as little as 30 minutes.
Submit Your Online Title Loans Form Today
In the cases where allowing a temporary credit score drop would benefit you financially in the long run, you should accept the loss, but sometimes you’ll want to avoid letting your credit score drop at all costs.
When you suddenly need more funds and can’t afford a credit score drop, consider getting a title loan from Tennessee Title Loans, Inc.
Tennessee Title Loans, Inc. will not report your loan to credit agencies, meaning that you can get the money you need without sacrificing your credit score.
Submit an online title loan form right now and you can qualify to receive your cash by the end of the day!
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.