It’s important to have a solid credit line when making purchases that require a loan. This includes car financing and home mortgages. The good news is that it’s always possible to build your credit if the score isn’t as high as you want it to be. One way you can do this is through a Toyota lease in Baltimore, MD.
How Does a Lease Build My Credit?
A car lease isn’t a loan. Rather, you’re paying an agreed-upon monthly installment to the dealership to essentially rent the vehicle for the lease duration.
As you make monthly payments, the dealership will update the credit bureau, demonstrating your financial responsibility. Likewise, if you miss or make late payments, this will also be reported. With this in mind, a lease can also hurt your score if you don’t properly manage your payments.
Why Is a Lease Beneficial for Building Credit?
Various factors contribute to your FICO score. About 35% of the score is attributed to your payment history. If you consistently make your lease payments, this will positively reflect on your payment history and give your score a much-needed boost.
A typical lease is 24 to 36 months, giving you an opportunity to build your credit long-term. Since monthly lease payments are lower than car loan payments on average, it’s easier to make on-time payments and improve your credit.
Some people fear that a lease can hurt their credit score since dealers will have to perform a hard pull credit inquiry, which can hurt your score. However, hard pulls typically only hurt your score if there are multiple credit inquiries within a short time span.
Come by Heritage Toyota Catonsville to see our latest lease offers, which may include beloved models like the Toyota Camry and more.
