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Will a car lease improve my credit?

22 February 2019
 

Having a good credit score is one of the most important aspects in your overall adult life. For most people, loans are a necessary part of life and maintaining a good credit score will make borrowing money much easier. 

If you’re looking to improve your credit score, there are many avenues you can take. Leasing a car might not seem like a great first option, but it’s a brilliant opportunity to show money lenders that you’re trustworthy and are responsible enough to stick to set monthly payments over time. 

For even more helpful reasons to make the switch to leasing a car, head to our post “Why Should I Lease A Car Vs. Buying One?”

How To Improve Your Credit Score

Understand that a serious improvement on your credit score won’t happen overnight, no matter what you do. It takes time to build and improve your score. But there are steps you can take to start that process, and leasing a car is a great one.

To get started with this process, keep these tips in mind:

1. Always Make Monthly Payments on Time

This is one of the most important and easiest ways to significantly improve your credit score. Most financial consultants will advise you to either set up automatic payments for your auto loan lease or to set reminders on your calendar to ensure that you remember to make on-time payments.

2. Try to Maintain a Healthy Mix of Different Types of Credit

Have a good mix of credit cards, store accounts, home loans, and related forms of credit. Maintaining a variety of credit lines and being able to pay them all back on time will help to improve your overall credit score. A car lease is an excellent choice along with a personal line of credit or store account to round out your personal portfolio.

3. Regularly Check your Credit Report

If you were unable to meet a number of payments for a particular account, it will reflect in your report. If you’ve skipped some of your loan repayments, that will also be reflected. 

All this public information will be available to money lenders as they try to decide whether or not they can trust you with handling credit. Regularly check your credit report and keep an eye out for negative reports. Then, you can take the necessary steps to pay these back as soon as you can so that these records can be wiped clean.

How Can Leasing a Car Improve Your Credit Score?

If your credit score is less than ideal and you would like to lease a car, think of this as an opportunity to improve your score.

Your payment history accounts for 35% of your credit check and score. When you decide to lease a car, you are agreeing to pay a fixed monthly repayment for the duration of the lease agreement. If you’re able to maintain timely payments each month, by the time your lease agreement is over, you’ll see an improvement in your score.

One of the most important factors to take into consideration when trying to lease a car is your budget. How much can you afford and will you be able to maintain these payments for the full duration of the agreement? 

Speaking to a reputable car leasing company can help. At My Mojo Auto Lease, we’re here to help you find the right car and agreement for your personal needs!