How to Increase Your Credit Score to Lease a Car

If you’re looking to buy a car and your credit score isn't where you'd like it to be, there might be some quick fixes you can try. Depending on what's keeping it in place, you might be able to add up to 100 points very rapidly.

Results could be drastic for scores in the "fair" and "poor" ranges of credit scores when looking to get a good deal on a car lease. You should have a credit score of at least 700 to have the best chance of being approved for good lease terms. 

Depending on the cost of the car, the down payment, and other credit or contract restrictions, some companies could be willing to lease to you even if your credit score is poor.

Leasing allows you to rent a car for a period of time without having to buy it. Without making a significant financial commitment, it can be an excellent way to receive a new set of wheels. 

Drivers who travel less than 15,000 miles annually and don't want to take a chance on mileage overages would especially benefit from it.

You should have a credit score of at least 700 to have the best chance of being approved for good lease terms. 

Depending on the cost of the car, the down payment, and other credit or contract restrictions, some companies could be willing to lease to you even if your credit score is poor.

Those with a lower credit score than 700 may still be offered an agreement but on less favorable terms. It's wise to go away and try and build up your score and then try again later.

Can you really gain 100 points quickly?

If you're frantically searching for ‘how to increase credit score’ then this may be of interest. You're in a better position than someone with a good credit history to do it quickly.

Is a 100-point boost feasible? Yes, according to Experian's senior director of public advocacy and education, Rod Griffin. 

According to him, a person is more likely to enhance their score by 100 points the lower their score is.  “The lower a person’s score, the more likely they are to achieve a 100-point increase,” he says. “That’s simply because there is much more upside, and small changes can result in greater score increases.”

If you’re trying to boost your credit score to secure a better deal on a car lease, or for any other reason, try some of these useful tips on how to increase your credit score.

1. Pay your credit card balances strategically

Your credit usage is the percentage of your credit limits that you are currently using. Utilize no more than 30% of any card's available credit; the lower the better. 

The top scorers use less than 7%. (By monitoring your credit score profile online, you can keep track of your credit use on each card and overall.)

As your credit score is determined by the balance when the card issuer reports it to the credit bureaus, you should make sure it is low. 

Paying down the balance prior to the conclusion of the billing cycle or making many payments throughout the month to constantly keep your balance low are simple strategies to accomplish this.

How quick is it: Quick. As soon as your credit card reports a reduced balance to the credit bureaus, your score will be calculated using that lower utilization.

2. Try to increase your credit limit

Your overall credit utilization immediately decreases when your credit limit increases while your balance stays the same, which might help you build better credit. 

You have a good chance of receiving a bigger limit if your income has increased or if you have added more years of good credit history.

How quick is it: Quick. As long as you don't use up the additional "space" on the card, the greater limit will reduce your overall credit usage once it is reported to credit bureaus.

3. Become an authorized user for a relative or friend

Ask to be added as an authorized user if a family member or close friend has a credit card account with a large credit limit and a solid track record of on-time payments. 

The credit limit on the account can help your utilization because it is added to your credit reports. Authorized user status, often known as "credit piggybacking," enables you to profit from the principal user's successful payment history. 

Your credit might increase without the account holder's permission to use the card or even giving you the account number.

To get the best results, make sure the account reports to all three major credit agencies (Equifax, Experian, and TransUnion); most credit cards do this.

How quick is it: Quick. The account can help your profile after you're added and that credit account starts reporting to the agencies.

4. Always pay your bills on time

If you make late payments, no credit improvement plan will work. Even worse, missed payments may appear on your credit records for a period of 712 years.

Call the creditor right away if you are 30 days or later with a payment. As soon as you can, make a payment and inquire as to whether the creditor would stop reporting your late payment to the credit bureaus. 

Even if the creditor refuses, it's still important to pay the bill in full as soon as possible. Your credit score suffers each month an account is designated as delinquent.

How quick is it: This can vary based on how recently and by how many payments you've fallen behind. Fortunately, the effects of late payments diminish over time, and increasing the number of good credit records can hasten this process.

5. Challenge your credit report

Your score may be lower as a result of an error on one of your credit reports. You may be able to improve your credit by disputing inaccuracies on your credit report.

You can order a free report from all three major credit bureaus and then examine them for errors. For example, late payments that were made on time, your credit activity being linked with someone else's, or unfavorable information that is too old to be included.

Once you've located them, challenge those mistakes. You might not always succeed, but it's best to flag something that you don’t think is right.

How quick is it: It varies. The credit bureaus have 30 days to look into it and notify you. Several businesses claim to be able to swiftly repair your credit and challenge inaccuracies but exercise caution.

6. Pay off any collections accounts

When you pay off a collection account, you remove the threat of being sued over the debt. There is a chance that you might be able to convince the collection agency to stop reporting the debt after you do. 

If collection accounts are inaccurate or too old to be included, you can also have them removed from your credit reports.

How quick is it: Quite quick. As soon as the paid-off status is reported to credit bureaus, it can improve your ratings on credit scores that don't take paid collections into account. The procedure could take several months in other circumstances, such as when contesting a collection account or requesting a goodwill deletion.

7. Try using a secured credit card

Getting a secured credit card is another approach to build or repair your credit. This kind of card is secured by a cash deposit, which you must pay upfront and which is typically equal to your credit limit. 

It functions just like a regular credit card, and timely payments help build up your credit over a certain set period.

How quick is it: Slow, it can several months. Having another card is not the only objective here, though it can somewhat raise your score by increasing your credit history's depth. Instead, you want to establish a track record of timely payments and low balances.

8. Try rent reporting services

Rent reporting services can update your credit records to reflect your on-time rent payments. However, be aware that not all scoring models take rent into account. 

Yet, if a potential creditor looks at your files, your rent history will be there, and a long history of reliable payments can only be positive.

Experian Boost is also helpful. The free Boost service asks for bank account links after which it searches for qualified rent payments, phone and utility bill payments, and payments for streaming services. 

Whatever payments you want to be listed on your Experian credit report is entirely up to you. 

How quick is it: Boost is instant. Its approach to rent reporting will differ depending on a customer's history, just like it does with other rent reporting providers. Some provide a quick "lookback" of the last two years' worth of payments, but without that, it can take a while to compile a history of on-time payments.

9. Add an additional credit account

Your credit might benefit from an additional, well-maintained credit account, especially if it is a new kind of credit.

If all you have are credit cards, you might think about getting a loan; a credit-builder loan can be an affordable choice. Be sure the loan you're thinking of applying for reports to all three credit agencies.

A new credit card could be helpful if you simply have loans or a few credit cards. By making additional credit available, it can improve your credit mix in addition to lowering your overall credit use.

How quick is it: Quick. The new account can start helping you as soon as the activity is reported to the credit bureaus.

Before you make up your mind on leasing, it might be worth considering a new way to get your hands on the latest cars – a car subscription service.

Here at FINN, we try and take the hassle out of getting a new car by offering a simple monthly payment that includes the cost of the car, as well as insurance and maintenance.

We run a quick credit check (this won’t affect your score) to determine if you qualify. Then, just select the car you like, and arrange your free delivery.

But if you want to get yourself a new car, and you decide that leasing is the way to go – be sure to check your credit report before going to any dealerships.

For those with a score of 700+, you should be able to get a pretty good deal. But don’t be put off or disheartened if your score is below 700 – which is 40% of Americans, according to Experian.

You can still go to a dealership and you may still get an okay deal on a lease, but it's recommended that you go away and try and build up your credit score using the tips above. 

Below is a summary of the tips and tricks above at a glance:

1. Pay your credit card balances strategically

2. Try to increase your credit limit

3. Become an authorized user

4. Pay your bills on time

5. Challenge errors in your credit report

6. Pay off any collection accounts

7. Use a secured credit card

8. Try rent reporting services

9. Add an additional credit account