During these tough economic times having bad credit can be a frustrating added woe. If you have a bad credit history and low FICO credit score this can add problems when you want to lease or buy a car.
Banks and finance companies have tightened up their policies and are much more cautious about doing business with “subprime” borrowers, especially those with bad credit histories.
In these slow car selling times, manufacturers and dealers are eager for business and are sometimes willing to take extra risk to secure more sales. This can be good news for poor credit car leasing.
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People with “subprime” credit should expect to pay higher interest rates and a higher down payment. They may even have to put down a higher security deposit for leasing. It’s important to make sure you check to make sure your credit report is accurate and dispute any mistakes you notice.
How To Build (or Rebuild) Good Credit History?
If you want to build good credit history or rebuild bad credit then follow some or all of these easy steps:
- Try to make sure you have a big difference between your credit card balances and card limits (do not “max out” your credit cards). This can be achieved by making large payments on your card(s).
- Keep credit cards open even if you don’t use them. Having those open limit cards can improve your credit score.
- Open new credit card accounts (not at the same time) and use them occasionally, but be sure to pay off the balance every month.
- Get department store and or gas card accounts. Make sure to use them but keep the balances low.
- If you have a really low credit score, open a secured credit card. You can get these from large national banks. You will have to make a security deposit but it functions like a normal credit card, not a debit card. This will help improve your credit score.
- Get a co-signer on a car lease. This will allow you to, in essence, borrow their good credit and build up your own credit.
- Make sure to pay your bills on time. One late, or missed, payment can be very detrimental to your credit score.
- Avoid defaulting on a car loan and/or repossession. This will harm your credit for seven years!
- Check your credit score! You can monitor your credit score with a free service, which lets you know when/if it changes.
Poor Credit Car Leasing Checklist
- Make sure to bring proof of employment including paystubs over the last 6 month period. This will help establish a pattern of continuity and show you have an income.
- References. Have the names and addresses of trusted friends and family members. You should aim to have about 6.
- Bring a copy of your credit report and make sure it is accurate. This will give you and the dealer a good expectation of your credit score before they look it up when finding your top car lease deal.
- Request a Free, No-Obligation, Car Quote. Bring your car research showing top special lease offers in -. This will show the dealer you know what you’re talking about and they will most likely be will be more accommodating to adapting your lease agreement terms to your poor credit.
