Can Car Leasing Help Build Your Credit Score?
Maintaining (and growing) a good credit score is the holy grail of personal finance. If you are financially savvy enough to keep your credit rating in the high numbers then you will be able to get a lot more of what you want in life – from brand-new leased cars to the perfect mortgage and more.
Many people have heard the secret that leasing a car can look really good on your credit report, so we thought we’d answer some commonly asked questions to see exactly how leasing a car can affect a credit score.
Does car leasing affect your credit score?
Absolutely. Car leasing is a large financial commitment and by managing this well, you show potential future creditors just how good you are with money. That said, while it can help you build your credit, there’s likely to be a minor negative impact at the beginning.
How can I build my credit score by leasing a car?
Your credit score, or credit history, is made up by getting positive points for doing things that position you as a trusted payer, and negative points by doing things that show you as being reckless with money.
At the point of taking out a lease for a car, you will be checked against your credit score and this check itself is a negative alert for the system. It’s minor, but every time you make a hard check against your credit rating, you let other potential credits know that you are hoping to borrow money – and that’s a negative thing.
However, once you have your car and you are making regular repayments, then it’s all up from there! Each payment you make reinforces the fact that you are a trustworthy borrower and it’s not too long before the minor setback that came from taking the deal in the first place is recovered and superseded with a rating that’s building nicely.
Of course – there’s the unfortunate chance that you may make a mistake and miss a payment, which will have a large negative effect on your rating. But, by prioritising your car lease payments, you can make sure that this never happens!
What kind of credit score do you need to lease a car?
Many leasing companies are looking for a strong credit rating to hand over the keys to a car worth tens of thousands of pounds – and do you blame them? Poor credit history indicates to them that you may fail to make a payment or two – costing them time and money, as well as extra administration for chasing up the payments.
However, if you do have less desirable credit, all is not lost. With short-term leasing, some great work from your broker who knows what finance companies aren’t as inflexible, and a willingness to work to improve your credit score, a brand-new car may still be yours!
To learn more about poor credit car leasing, and even bad credit car leasing (rarer, but possible), give us a call at Complete Leasing and we’ll work out a deal that will fit you and your budget perfectly.
Can Complete Leasing help me improve my credit through car leasing?
Of course we can! Give us a call or fill in our short contact form to find out how, and you’ll soon be on your way to leasing a brand new car that’s improving your credit score.