Does Leasing a Car Build Credit?

Leasing a car definitely helps build credit. Leasing a car is actually an excellent way to help build your credit because it requires you to make a payment every single month until the end of the lease. As a result of this hefty responsibility, having an auto lease on your credit report is much more advantageous that having say a credit card account. The consequences of missing a payment on a credit card aren’t nearly as intense as the consequences associated with missing a payment on an auto lease. If you miss a payment on your auto lease, the bank can and will repossess your car.

The most popular type of credit being used is probably credit cards partly because they have become so easy to get access to. Some people only have credit cards and no other type of credit such as mortgages, loans, or car leases in their current or past credit history. This is not smart if you are attempting to build your credit. One of the factors that influence your credit score is the types of credit you have used. In fact, one of the best known credit scoring companies, FICO, uses the types of credit that you have used in order to determine 10 percent of your FICO score. Therefore, using different types of credit can significantly improve your credit score.