Does Leasing a Used Car Affect Your Credit?

March 15th, 2022 by

credit amnesty dealership

If you’re signing a car lease, you probably have some questions. One we hear often at our credit amnesty dealership is “Will this lease affect my credit?” In many cases, it can!

Here’s what you need to know about what could happen to your score if you lease a used car at Ole Ben Franklin Motors.

Late and On-Time Payments

Every month you make a lease payment, and this can actually work out in your favor. If you pay on time each and every month, that can actually help you build up your credit score over time. Other potential lenders can look at your history of paying on time and they’ll see you as a more reliable person to lend to.

On the other hand, if you keep making late payments that could actually adversely affect your credit score. Too many late payments can lower your score and make you less attractive to lenders.

Defaulting on a Lease

Defaulting on your lease agreement can also result in a hit to your credit score. Not fulfilling your side of the lease agreement can make other lenders think that you don’t take your financial obligations seriously. That can hurt your chances of securing other loans in the future.

Pursuing Other Loans

You should also keep in mind that anyone checking your credit will be able to see that you are currently leasing a used car. This can sometimes make it harder to get a loan or commit to another financial obligation. If a lender looks at your income and current debts, they might believe that a loan from them or another financial agreement could overextend you.

If you have any more questions about how leases work or how they can affect your credit, visit our used car dealership serving Oak Ridge, TN. We’ll make it easy to understand how a lease can help you build up your credit!

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