Will Leasing a Car Improve My Credit Score?

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.

, - May 1, 2019

Just like financing, leasing a car can help you improve your credit score, as long as you make each payment on time. Unfortunately, not all leasing companies offer financing to consumers with bad credit, but there’s still a chance. If you’re looking to lease your next vehicle but your credit isn’t in the best shape, you should try to put yourself in a better position when the time to lease comes around.

Getting a Car Lease with Bad Credit

While you could walk into a dealership and ask about leasing with bad credit, you really should try and improve your credit as much as possible ahead of time. Some things you should do beforehand include:

  • Check your credit – Make sure you know where your credit score stands and what’s on your credit reports at least two months before you decide to lease. You may be surprised by what you find. Your credit could be better than you thought, or you could have inaccurate information listed that needs to be disputed with the reporting credit bureau.
  • Budget accordingly – Leases are generally cheaper in the short term since you’re only paying for a portion of the car (instead of all of it). When budgeting for your lease, choose an affordable vehicle. Don't forget that you also need to consider additional costs such as basic maintenance, fuel, and taxes and fees.
  • Have a security deposit – Lessors often require you to make a security deposit, and sometimes multiple ones if you have bad credit, in addition to the first month’s payment upfront. Depending on the lessor, you may even need to make a down payment, which is called a capitalized cost reduction in leasing.
  • Shop for a lease, not a car – Leases are usually under the control of the captive lenders of manufacturers, and each has different requirements. Not all lessors have bad credit leasing options, but some, such as Kia, sometimes consider those with less than perfect credit. Make sure you check out multiple leasing options.

Is There a Minimum Credit Score Needed to Lease a Vehicle?

It’s hard to say what the cut off credit score is when it comes to car leasing. Generally, however, if your credit score is below 600, you can expect to find it more difficult to lease. Again, it ultimately comes down to the leasing company. This is where rate shopping comes in handy – just because one leasing company turns you down, doesn’t mean another is going to.

If you do get approved with bad credit, be ready for a higher monthly payment. On top of taxes, fees, and the required security deposit, you can expect to pay a higher interest rate to offset the risk your credit score imposes

The Bottom Line

Leasing isn’t for everyone. While it’s possible to get approved for an auto lease with bad credit, you really should focus on financing. Although it may feel more expensive, bad credit car financing gives you the chance to improve your credit over time, and is easier to get approved for.

It takes time to build credit, and taking out a subprime auto loan is a great first step toward leasing that dream vehicle of yours. If you’re ready to be proactive in your credit-building journey, let us help you find a special finance dealer to work with.

At CarsDirect, we help consumers find financing by connecting them to local dealerships that can help. Getting started is easy, just fill out our free and quick car loan request form and we’ll get right to work for you!


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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.

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