You may be able to take out a car lease with bad credit if you can demonstrate that you can afford the monthly payments and are open to consider other options to improve your chance of being accepted for a car lease deal, such as paying a higher initial rental or having a guarantor. Although ultimately the decision will be down to our leasing partners, who have varying criteria, therefore this is likely to differ between them.
What Credit Score Do I Need To Lease A Car?
To lease a car or van, our leasing partners typically require at least a good credit score to take out the lease. Our leasing partners will require a credit check to be passed, along with other checks, before being able to offer a lease agreement. If you have a credit score of 700 and above on the FICO credit check score, you will certainly be about to get food car lease offers. Anything above 670 on the FICO scale is seen as good credit, and if your credit score is below this then you may face some challenges. Therefore, this figure may be a good basis and goal to work towards before applying for a car or van lease and it may be a good idea to check your credit score to see where you are in comparison to this figure. That said, our leasing partners and their funders have varying criteria when it comes to adverse or bad credit car leasing and some may be more lenient than others. In some scenarios, a funder may still allow a car lease for a person with a lower credit rating if they are able to prove they can afford the monthly payments, or potentially paying a higher upfront amount. If you have spotted a deal you like on LeaseLoco, you’re probably best to have an open and honest chat with our leasing partner to see if they are happy that they should be able to help before starting the formal application process.
How To Lease A Car With Bad Credit
We know leasing can be tough when you’ve got bad credit. Here’s a few tips to help you if you’re finding it hard to gain a lease.
Consider a Guarantor.
This is someone who agrees that they will pay your lease payments if you are unable to, often a family member. They will be responsible to cover your payments if you fail to do so and will usually need to have a strong credit rating. Although it is important to remember that not all funders will accept a guarantor and if the monthly payments are not made on time, then both the applicant and the guarantor will have their credit score affected.
Apply for a Joint Account.
You can apply for a joint account with a partner or family member and use both of your personal details in the application. Both parties in the joint account will be responsible for making the payments and both parties will need to be living at the same address. However, only certain funders will do this, so best to double-check this when enquiring.
Higher Interest Lease Agreements
Certain funders will accept car leasing for those with bad credit based on the agreement that they pay a higher rate of interest. This is due to funders often considering how much of a risk an applicant with bad credit poses and will set a rate of interest based on this.
Ways To Increase Your Credit Score
If you’re looking to simply increase your credit score in general to increase your chances of being accepted for a lease deal, we’ve got a few tips worth looking into.
Register to vote
By registering to vote, you are proving where you live by providing your current address, which helps to improve a poor credit score.
Make payments on time
Pay any bills or accounts on time to show leasing companies that you can make payments on time and are responsible with your finances.
Ensure you have credit history
If you have no financial history then it may be a challenge to get a lease deal secured as the funders have nothing to judge how capable you are of handling your finances. Therefore, it is important to make sure you have some financial history.
Avoid linking yourself financially with others with poor credit
By linking yourself financially to someone, such as through a joint bank account, you may be co-scored and if they have a poor credit score, this can have an impact on yours. If you are splitting up with a partner, it is important to separate your finances.
‘Soft-check’ when you can
Some lenders, including some of our leasing partners, will be able to soft check you, to see if you would be approved. This check does not impact your credit score as opposed to hard checks, so do this when possible.
Experian Boost initiative
Experian has created an initiative that helps increase credit scores by sharing how you manage your money, including payments to savings accounts, council tax, Netflix etc.
Use rebuilding cards to build history
There are credit-building cards designed for those with poor credit, usually with a low limit and high interest. However, these cards show that you are paying bills and show you are reliable financially.
How Will Car Leasing Affect My Credit Score?
Car leasing is similar to anything else that you pay monthly and will affect your credit score. So long as you make the payments on time then it will help improve your score by showing you are paying regular payments. As a car lease is essentially a ‘loan’ and you are simply paying the total cost of the lease for the car back to lenders, it is a form of finance. If you don’t make the monthly payments on time, then your credit score is likely to be negatively impacted. You may also be negatively impacted if you apply for finance from the funders and are rejected, as this will show up on your report.
Can I Lease A Car Without A Credit Check?
Unfortunately not. Our leasing partners will require a credit check to be passed before being able to offer you a lease deal as this is the best way for them to determine whether you will be able to make the monthly payments. Don’t be mistaken by ‘no credit check car leasing’ as these will certainly be misleading. The BVRLA states that all BVRLA leasing broker members adhere to FCA rules and will carry out credit checks, and those who don’t may be out to scam you – so be wary! Even though a credit check is required, the best thing to do is have a conversation with our leasing partners about your circumstances and see what they advise as they may well be able to assist you, even if it's just pointing you in the right direction.
Ready to Lease Your New Car?
If you have a good credit score, you will be likely to be accepted for a car lease, although if you are looking for a car lease with bad credit then it’s worth finding out what our leasing partners can possibly do for you. Now that you have read all about car leasing with bad credit, you can search and compare the millions of car lease deals available at LeaseLoco to find the perfect deal for you and make a free enquiry with our leasing partners. If you’re new to leasing and have some more questions, feel free to read our FAQs which you may find useful as it covers the most common questions asked about leasing with LeaseLoco. If you have any additional questions about searching for your perfect lease deal, give us a message on our available live chat and we will be happy to help.