What credit score is needed for you to Lease a Car?

Alright! You want to get a car. You are thinking about how to get a good deal. I mean you want to get a car on lease. But it depends on some kind of credit score system. We are here to help you understand the consumer credit score accessing system.

In layman’s terms, it is a numerical expression. That’s it. It shows a person’s financial fitness to borrow depending on several factors. We will be going through all these factors, don’t worry, it’s just a walk in the park. It’s all to do with your previous financial dealing, all connected to bills paid, checks given/received, owner titles of properties and mortgage commitments, and of course much more. That is the only way someone can be judged to be financially sound, stable, and predictable. It’s different compared to getting a loan against property or some other concrete, tangible assets of substantial value. It’s just as we put it, concrete assets of value that has resale value of worth. A person’s credit score is calculated by how the person has been living, not what that person has. To that effect, a person’s credit score will be formed by the person’s entire past financial dealings. Yes, if you have properties, that’s a plus. It will be reflected in your credit score as your purchasing power. Provided the assets in question should not be presents or an inherited thing.

Here are the factors of your past dealings that can have to affect your credit score:

Your credit history snapshots

Experian, Equifax, and TransUnion are three consumer credit reporting agencies that keep a tab on your borrowings. All your borrowing activities are recorded in credit reports regularly. These reports have a bearing on your credit score. Thus, when you go to get something on a lease, the leasing company will check out these reports and can easily judge if you are safe enough to do business with. Remember, a leasing company is hungry for customers too. But they have to know that the prospective customers are safe to invest in. One simple way is to have something as collateral that the company can sell to recover the amount from you. Another way is to judge your financial history based on your credit score. It tells them you are trustworthy enough to invest in. The credit score deals with your payment history, how much do you owe, how much credit are you taking and what are your credit limits? How long have been taking and using credits, how many credit accounts you now have, and how many types of loans do you have to pay off? That’s a lot of snooping into your personal life right? Well, these companies just want to cover their ends, that’s all. Don’t blame them. They just don’t want to lose money. Would you want to just get fooled out of your money? They thoroughly check your financial history from consumer credit reporting agencies to protect their businesses. Credit bureaus, banks, and credit card companies can give you access to your credit score for a service fee.

The auto industry recognizes only two credit score systems: FICO scores and Vantage scores. It’s through the standards of these systems your credit score will be judged and deem fit for a leasing service.

Let’s discuss what are the credit score numerical expressions are. Well, it’s something like this;

Credit ScoreRating
Bad300 to 629
Fair630 to 689
Good690 to 719
Excellent720 to 850

You will need to have at least 660 to 700 as your credit score or above to get a leasing company to lease a car to you. According to Experian, you will need 700 on a credit score and not less. But really it depends on the dealership. Almost all dealerships want a credit score of at least 620 while 679 is near perfect. If by chance if you have a credit score of 680 may be leasing companies will be seeking you out. After all, they have now the ideal customer, who is going to pay their interest regularly every month, on time. Read and see why we say that. Punctuality is very important and can be gauged by your history of credit dealings.

How can you improve your credit score? There has to be away. And yes, there is.

credit score is needed for you to lease a car

Improving the credit score

You have to discipline yourself and follow these guidelines. It’s not going to be easy but of course, it can be done.

Every month pay off the loans you owe

You can start paying every month at least the minimum payments on all credit card loans. Just not paying back what you took is important but paying back on time. So remember also be punctual about it. The difficulty lies with being disciplined. Control your spending. Save the money to pay back the loans. First, pay back what you owe.

Use only a percentage of your credit

Control your buying on credit addictions. Any lender or leasing agent will notice this. Don’t just throw your available credit away on non-essential items. Your outstanding balances should not exceed 30%.

Maintain your credit card accounts

Now, why should we keep our accounts open?  We are not using them. What is the point? There are reasons to keep all accounts open. Firstly, it will show that your accounts are operational for a while and that’s a good sign to a leasing company. Secondly, it reduces your credit limit overall. So don’t do it. Really, how much does it take to keep them open? Not much especially when compared to the advantages for a leasing company.

Control credit card balances

A tried and tested way is to reduce the balances on all your credit cards. This will show the leasing companies, that you have absolute financial control and can repay them on time. You can do this by paying off balances and get it down. Near 30% would be good as mentioned above.

All bills have to be paid on time

How? Get this straight, pay every bill you have on time, and be regular about it. Yes, that means every month you pay all your bills on time. The phone bills, utility bills and credit card bills, and any other kind of bill you have. This will show up in your credit score and don’t forget that everything is being recorded by those consumer credit reporting companies. These records are especially available to large companies, banks, and of course the government. This will make a leasing company judge you as a person that will pay regularly and on time.

Credit report errors

Yes, this has been noted to happen. Computers start acting up, errors creep in and data is distorted to destroy. So keep all your bills and other payments in order, filed, and regularly check everything up against your credit score.

Conclusion

Just control your spending, think about the car. If you don’t spend you will have that extra money to pay off bills and the payments must be done on time. Show discipline and show self-control as an adult. You will get that car and drive off with it. All you have to do is follow the advice in this article.  Good luck.

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