Everyone knows that pawn shops can be a lifesaver when you need cash fast. But does pawning affect your credit score? In this post, we answer this and other common questions about pawn shops and pawnbroking.
Does Pawning Affect Your Credit Score?
The quick, short answer is no, pawning an item or failing to repay a pawn shop loan does NOT affect your credit score either positively or negatively.
In other words, while repaying a pawn shop loan doesn’t help improve your credit score, defaulting on your pawn shop loan won’t negatively affect your score either.
The reason is simple: pawn shops do NOT report your credit history to credit bureaus. From the standpoint of your credit score, whatever you do in a pawn shop, stays in the pawn shop.
Does Your Credit Score Affect Pawn Shop Loans?
As we mentioned earlier, pawning does not affect your credit score.
And the opposite is true as well: your credit score plays no role in the conditions of a pawn shop loan or in how much you can get when you pawn an item.
That’s part of what makes pawn shop loans so convenient. A pawn shop loan is based on the value of your collateral, not on your credit history or other obscure factors such as the length of your credit history, or your personal mix of credit.
Is Pawning Considered a Loan?
Yes, when you pawn an item you are technically taking out a short-term loan using the item as a collateral.
When you repay your pawn shop loan, you get your item back. If for any reason you can’t repay the loan, then you can choose to surrender the item you pawned as payment in full.
However, it bears repeating: even if pawning is technically a loan, pawning an object does not affect your credit score in any way — even if you decide to surrender the collateral.
Is There an Alternative to Pawn Shop Loans?
The most common alternative to pawning an item is to sell it.
You should consider selling your item if you want to get more cash and are OK with parting ways with your item definitely.
If the object has sentimental value, or you just want to retrieve it after repaying the money, then a pawn shop loan is the way to go.
Keep in mind that while most pawn shops loans have a term length of 120 days (four months), plus a 10-day grace period, the AJ’s Advantage gives you 150 days (that is 5 full months) to pay back your loan! And if you cannot pay back the loan in full, including any applicable grace period, we offer extensions to give you even more time.
Looking To Pawn or Sell? AJ’s Super Pawn Can Help!
If what you need is a dependable, trustworthy pawn shop in Southern California, look no further than AJ’s Super Pawn.
We have locations in Pomona and Chino California. Give us a call today (Pomona: 909-622-0334 , Chino: 909-465-5456) or fill out the contact form to get in touch with our team!