What Credit Score Is Needed to Qualify for a New Car Lease?

When you lease a car, your credit score is a large factor when it comes to getting approved by the leasing company. And while you don’t need to have a perfect score and a spotless credit history to lease a car, the higher the credit score the better. But what kind of credit score is the leasing company looking for?

The minimum credit score needed to lease a car can vary

A leasing sign is displayed in a window
A leasing sign is displayed in a window at a General Motors dealership. | (Photo by Spencer Platt/Getty Images)

When leasing a car, the minimum credit score that is required can vary from dealer to dealership, reports Car and Driver. However, the typical minimum score needed is 620 as that’s what most leasing companies will look for. A higher credit score in the 620 to 670 range is more favorable when being able to lease a car, but if you want to qualify for special rates or offers, then a 680 to 739 is considered ideal by most dealerships standards.

Why is a good credit score so important when leasing a car?

 A Ford car showroom promotes the sale of private leases.
A Ford car showroom promotes the sale of private leases. | (Photo by Michel Porro/Getty Images)

When you fill out a credit application at the dealership when you want to lease a car, there are certain factors that leasing companies look for. According to Experian, your credit score is the first thing that they check as that shows how much of a risk you are. The general thought is that the higher the score, the more likely it is that you have made all of your payments on time have a low debt-to-income ratio.

Having a good credit score will not only get you approved for a car lease, but it will also grant you access to lower money factor rates, which is equivalent to interest on a traditional car loan. With a lower money factor, you’ll enjoy the benefit of lower monthly payments and less cost in the long run.

Can you lease a car with a bad credit score?

In this photo illustration, a businessman holds his smartphone showing a graph with the credit score.
In this photo illustration, a businessman holds his smartphone showing a graph with the credit score. | (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)

Yes. Experian reports that you can lease a car with a lower credit score rating, however, it could be a little more challenging. With a lower credit score (620 or lower), you could be limited in the selection of cars that you can lease as some of the cars that you might get approved will likely be base-trim models.

A lower credit score can also yield a higher money factor, which will in turn raise your monthly payment amount. However, you can easily lower those monthly payments by putting a larger down payment, also known as a “cap cost reduction.” If you are unable to lease a new car due to a bad credit rating, then you can always opt to transfer over someone else’s lease. Sites like Swapalease.com exist for lessees that are looking to get rid of their current lease by transferring it to someone else that can qualify for it.

Although a good credit score (620 and above) is highly recommended when leasing a car, it’s not always necessary. Also, you don’t need to have a perfect score and history, however, the cleaner it is the better.

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