Banking Category Banking: the easy, simple banking guide

Credit score needed to lease a car

Leasing a car can be an appealing option if you like getting new vehicles frequently.

As long as you are willing to stay within the mileage requirements and maintain the car properly, you can get a new car every three years.

However, you need a good credit score to lease a car. The exact score required can vary, but if your score is on the lower end of the scale, you may not be able to get a lease or you'll be penalised with a high interest rate.

Lease Definition

Most car leases are closed end, which means that you use a car for a certain period of time, such as three years. At the end of the lease, you return the car and walk away without any further obligation. However, if you drove an excessive number of miles or if the car shows more than normal wear and tear, you may have to pay additional fees.

If you want to keep the car, you can pay its residual value, along with a processing fee, and it will belong to you. This value is determined when you sign the lease.

Credit Score Definition

Your credit score is a three-digit number compiled based on factors related to your credit history. According to Fair Isaac Corp., which compiles the FICO credit score, these factors include your bill payment history, the amounts you owe, credit limits, length of credit history and the types of accounts you have.


According to the Lease Guide, you will normally need a credit score of at least 640 to be able to lease a car, although you may be able to qualify for a lease with a score as low as 600. If your score is 700 or above, you'll be eligible for the best interest rate. Lower scores mean you will pay a higher interest rate to offset some of the lender's risk. The Lease Guide says you may be able to get a lower rate if you are willing to put down a higher security deposit.


If your credit score is right on the borderline, you may be able to raise it enough to get a lease. Get a free copy of your credit report from Transunion, Equifax and Experian.

These three agencies are required to give you a free report every year if you ask. Look for incorrect or unverifiable negative items and file a dispute for any that you find.

If the credit bureaus cannot verify these items, they must be removed. This often raises your score enough to allow you to get your lease.


If you are unable to qualify for a lease due to a low credit score, the Lease Guide says you may be able to do a lease takeover. This means you find someone who needs to get out of his lease and agree to take over his car and payments. The lease company will have to approve this transaction, but the requirements are typically not as strict as getting your own new lease. This is a good option for people with a borderline credit score who just miss qualifying for a lease.