What Credit Score Is Needed to Lease a Car?
5 Min Read | Last updated: October 14, 2024
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There’s no minimum credit score needed to lease a car, but your credit history still matters. Having good credit can help you get approved with more favorable lease terms.
At-A-Glance
- Credit score can influence both your ability to lease a car and the interest rate you’ll have to pay.
- In general, the higher your credit score, the less you’ll pay over the duration of the car lease.
- You may be able to lease a car even with “bad” credit or no credit history.
Maybe you prefer driving a new car every few years. Or maybe the economics of leasing a car fits your lifestyle better than buying one. No matter the reason you’re looking to lease, you lenders may first check your credit score and credit history to determine your eligibility and lease terms.
While there’s no minimum score needed to lease a car, it’s a good idea to make sure your credit score is in the best possible shape to boost your chances of approval and to possibly qualify for better lease terms.1 Here’s why.
What Is a Good Credit Score to Lease a Car?
There’s no set credit score number that will automatically qualify you for — or prevent you from — leasing a car. But as with other credit and lending situations, like getting a mortgage, obtaining a personal loan, or opening a new credit card, the higher your credit score, the more favorable terms you can expect.
That’s because a higher credit score makes you less risky in the eyes of lenders. Less perceived risk typically translates to a lower interest rate, which means you’ll pay less each month and over the life of the lease. It also could mean having to put down less money at lease origination.
In its State of the Automotive Finance Market Q1 2024 report, Experian, one of the three major credit bureaus, showed how credit score plays a part in how much money you could expect to pay per month on a car lease:
Average Monthly Lease Payment by Credit Score2
| Credit Score | 2024 | 2023 | 2022 |
|---|---|---|---|
| 781-850 (super prime) | $594 | $609 | $541 |
| 661-780 (prime) | $591 | $595 | $532 |
| 601-660 (near prime) | $609 | $607 | $538 |
| 501-600 (subprime) | $606 | $594 | $522 |
Since 2019, Experian’s data has shown a difference of roughly $20 from the highest credit score tier to the lowest. While that may not seem like much at first, remember this is per month. If the typical car lease is three years, that means an extra $720, on average, over the length of the lease (36 months x $20). Payments could be higher or lower depending on the dealership and the negotiated terms of your deal.
Can You Lease a Car with Bad Credit?
For most credit scoring models, a credit score below 600 is typically considered less than ideal for getting approved for credit and acquiring more favorable loan terms. You may have heard this range referred to as “bad credit,” but the credit scoring companies label scores in this range as “fair,” “poor,” or “very poor.” Specifically, FICO considers 580-669 as “fair” and 300-579 as “poor.” VantageScore considers 500-600 as “poor” and 300-499 as “very poor.” 3
But as long as you’re in a financial position to make lease payments on time and in full, don’t let a low credit score deter you from trying to lease a car. Seventeen percent of new leases in the fourth quarter of 2021 were given to people with credit scores of 660 or lower, according to the same Experian research. That percentage has been quite consistent over the past three years of data.
New Leases2
| Credit Score | 2024 | 2023 | 2022 |
|---|---|---|---|
| 781-850 (super prime) | 46.68% | 43.55% | 41.2% |
| 661-780 (prime) | 39.62% | 42.94% | 45.63% |
| 601-660 (near prime) | 9.93% | 10.03% | 10.06% |
| 501-600 (subprime) | 3.48% | 3.24% | 2.95% |
With a low credit score, however, you might have to make a significant down payment and accept a higher than average interest rate.4 Your credit score might also help determine the type of car you can lease. For example, a dealership may be more likely to lease an economy car to someone with bad credit than an expensive luxury vehicle.
What If You Have No Credit History?
Having no credit history may not immediately preclude you from being able to lease a car. While it does present a greater risk for the lender, you may still be able to qualify for a lease. And if you do qualify for the lease, you’ll be on your way to establishing a credit history.
One way to help boost your chances of getting a lease with no credit history is to make a hefty down payment.1 A down payment can help make the lender feel more comfortable about taking on the risk of lending to an applicant with no credit history. A larger down payment also means less money for the lender to lend. Better yet, that down payment may help reduce your monthly payment.
Another way to improve your chances of approval is to have a cosigner — someone who agrees to accept responsibility for paying the lease if you no longer can. Ideally, a cosigner should have a good to excellent credit score. But remember: If you use a cosigner, late or missed payments will negatively affect both your credit history and the cosigner’s credit history.6
The Takeaway
A low credit score won’t necessarily keep you from leasing a car, but it could determine how much you end up paying — up front and over the life of the lease. It’s a good idea to build your credit score to help increase your chances of approval and save money on your car lease.
1 “Does Leasing a Car Build Credit?,” Experian
2 “State of the Automotive Finance Market Q1 2024,” Experian
3 “How to “Fix” a Bad Credit Score,” Experian
4 “Car Leasing Guide: How to Lease a Vehicle in 2024,” Kelley Blue Book
5 “What Credit Score Do You Need To Lease A Car?,” JD Power
6 “Why would I need a co-signer for an auto loan?,” Source
Michael Grace is a personal finance and technology freelance writer based in New York.
All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.
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The material made available for you on this website, Credit Intel, is for informational purposes only and intended for U.S. residents and is not intended to provide legal, tax or financial advice. If you have questions, please consult your own professional legal, tax and financial advisors.
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