Leasing can be an affordable and convenient way to start driving a new vehicle. However, does leasing a car help your credit score? Tumminia Mazda provides an inside look.
Leasing Overview
When you finance a vehicle, you must apply for a loan to cover its entire cost. A lease, however, is similar to a car rental. You’re only responsible for covering the vehicle's estimated depreciation during your lease term. You don’t need to apply for a loan, but lessors still review your buying criteria to ensure you will be able to cover the cost of your lease.
Credit Factors
There are many different factors that can affect your credit score, such as:
- Your payment history and how often you pay accounts on time
- Your credit utilization and how much credit you have available
- Your overall credit history length
- The amount of credit inquiries you have
- Your credit mix of accounts (installment loans, credit cards, etc.)
- Any delinquent or derogatory accounts
- How Leases Can Impact Your Score
A few of these factors can be affected by your Mazda lease. First, the initial hard inquiry can cause a small dip in your score as well as the fact that you added additional debt. However, this can add another type of debt to your credit, which improves your credit mix. Plus, by making regular, on time payments, you are demonstrating that you can borrow money responsibly. On the other hand, if you miss payments or don’t pay on time, that can negatively impact your score.
Lease a New MAZDA Vehicle in Olathe, KS
While it may initially have a negative impact, a Mazda lease can certainly help your credit. We can help you secure a new Mazda lease in no time at our dealership. Visit Tumminia Mazda to get started today!
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