Credit Needed To Lease A Car
If you like to drive new cars frequently, it means that you are interested in leasing. If you are willing to stay within the mileage requirements and take good care of the car, you can get a new one every three years. However, one of the main conditions to get qualified for a lease is to have a good credit score. The exact credit needed to lease a car can vary, but if you know that your score is on the lower end of the scale, you might want to think about alternatives or you will be penalized with a very high interest rate.
Your credit score is a three-digit number complied based upon the factors related to your credit history. According to Fair Isaac Corp. (which compiles the FICO credit score), these factors include your bill payment history, credit limits, the amount of money that you owe, length of credit history as well as the types of accounts that you have.
According to LeaseGuide.com, in order to be able to lease a car you must have a credit score of at least 640, although you might be able to qualify for one even if you have a score below 600. If your score is 700 or anything above that, you will be eligible for the best interest rate. The lower scores translate into higher interest rates to offset some of the lender’s risk. The same source says that you might be able to get a more affordable rate if you can put down a bigger security deposit.
If your current credit score is right on the borderline, you need to know that you might be able to raise it enough to get eligible for a car lease. We advise you to get a copy of your credit report from Equifax, Transunion and Experian. These three agencies are required to give you every year a free report if you ask them. After you get them, check out for unverifiable negative or incorrect items and file a dispute for anything that you feel it’s wrong. If the credit bureaus cannot check these items, they must be removed, which will raise your credit score.
If you can’t match the credit needed to lease a car, LeaseGuide.com says that you might want to do a lease takeover. In other words, you have to find someone that wants to get out of a lease and he agrees that you take over his car and payments. The company in charge of the lease will have to approve this transaction, but in most cases, the requirements are not as strict in comparison to when you try to get your own lease.