How Does an Auto Lease Look on My Credit Report?
An auto lease is reported on a credit report as an installment trade, meaning that there is a set monthly payment that is due on a regular basis. A lease is reported to the credit bureaus in the same fashion as a car loan.
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Identification
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On a credit report, look under the installment trades section. In most cases, the lease will be listed by lender, length of term and monthly payment, followed by payment history. For example, a 39-month lease through Volvo Car Finance would look like this:
Volvo Car Finance / 39M497 / 111111
The 39M497 refers to a 39-month lease at $497 per month, and the 1s acknowledge that you have paid as agreed for the last six months.
Benefits
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As a lease is reported no differently than a loan, a lease paid on time boosts your credit score as much as a regular loan.
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Considerations
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Although a lease is shown on your credit report in a manner similar to a loan, a lease requires better credit to get an approval.
Warning
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Do not let a dealership tell you that a lease will not show up on your credit report. As LeaseGuide.com notes, a lease is not like renting; it requires credit approval, and all installment payments will be reported to the credit bureaus.
Potential
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Having an auto lease gives you a chance to add another item to your installment credit file, which can make it easier to get future loans.
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References
- Photo Credit mercedes benz g-class gelandewagen luxury suv car image by alma_sacra from Fotolia.com
