Is a credit check required for car leasing?

In a world where owning a vehicle is not always the most practical or cost-effective choice, car leasing has emerged as an attractive alternative for many individuals. Whether you're a young professional seeking flexibility or someone who simply prefers not to commit to long-term vehicle ownership, leasing offers a range of benefits. However, before you can slide into the driver's seat and hit the road with a leased car, one question looms large: "Is a credit check required for car leasing?"

Understanding the ins and outs of car leasing can be a complex endeavour, but we're here to shed light on this important topic. In this blog, we'll explore the significance of credit checks in the car leasing process and the role they play in determining your eligibility. Whether you’re considering leasing a new car, or a used vehicle, this blog is a must-read.

Do I require a credit check?

In short, yes, it is necessary to undergo a credit check or credit search when leasing a vehicle. This is when a creditor examines your financial information by accessing your credit report. This helps to determine your reliability as a borrower and to ensure that you are likely to fulfil your monthly payments for the vehicle.

When a credit check is performed, it generates a credit report that provides an overview of your financial history. There are two categories of credit checks: hard checks and soft checks. Credit checks typically take into account various factors, such as:

• Your credit history including details of your past borrowing and repayment behaviour e.g. any late payments.

• Your outstanding debts.

• Any County Court Judgments (CCJs) you have.

• Personal data including DOB, address, marital status etc.

• Electoral roll check.

• Any repossessions or bankruptcy.

How long does a credit check take?

Upon submitting your application, most lenders will conduct an instant credit check, which generates an automated decision based on the results. However, it is typically the responsibility of an underwriter to manually review the credit check, and this can take a bit longer. Usually, you can anticipate a decision within 24 to 48 hours, but during peak times it could take up to five working days. Once a decision has been made, we will contact you to inform you of the lender’s decision and the next steps based on this.

What credit score is required for car leasing?

In general, a credit score above 700 is generally considered a good starting point to qualify for a lease. Nonetheless, it's important to note that credit scores do not solely determine the outcome. Lenders also consider factors such as income, debt-to-income ratio and employment history. Having a higher score boosts the likelihood of getting approved for credit.

Even if your credit score falls below 700, there may still be leasing options available to you. However, it's important to note that you might encounter more restricted choices or the requirement for a larger down payment. When considering leasing a vehicle, it’s best to be as honest about your credit history as possible, in order for us to assist you.

You can find various online credit rating services where you can input your information and check your credit rating. Examples of such websites include Experian and ClearScore. Usually, these services come with a fee, but many providers offer an initial free trial period.

Why might someone get declined for credit?

The primary factor behind a declined application is financial capacity. If the credit assessment indicates that you may struggle with meeting the regular monthly payments, we regrettably cannot move forward with your application. Additionally, if your credit check reveals the presence of CCJs or a history of delayed payments on your credit profile, we are unable to move forward with your application. This decision is rooted in the commitment to safeguarding your financial well-being. Placing you in a situation where there's a risk of accumulating further debt or financial challenges would not be in your best interest. If you're still looking to lease a vehicle, you should address any existing financial issues before reapplying, as this may improve your eligibility in the future.

How can I improve my credit score?

For those with a low credit score, it's recommended to enhance your credit score before applying for a lease. By doing so, you can boost your chances of getting approved for finance and gain access to the best lease deals available. Below are a few suggestions to help improve your credit score.

• Review your credit file for errors.

• If you haven’t already, sign up to the electoral roll.

• Pay off any existing debts if you can.

• Verify if your credit file is connected to others such as a spouse or relative as this may be impacting your credit score.

• Analyse your credit report for any signs of fraud. If you find anything suspicious, this needs reporting.

Does vehicle leasing impact your credit score?

Yes, vehicle leasing can impact your credit score. When you enter into a vehicle lease agreement, your lease payments are recorded in your credit history, and your credit score can be influenced accordingly.

Consistently making timely lease payments can positively influence your credit score. It showcases your responsible financial habits and contributes to building a positive credit history. On the other hand, missing or making late lease payments can have adverse effects on your credit score.

Contact GB Vehicle Leasing Today

If you have additional questions about vehicle leasing, feel free to contact GB Vehicle Leasing today for more information. We recognise that leasing a vehicle sometimes raises numerous inquiries, and our team is here to provide the answers you seek. Whether you have questions regarding credit requirements, lease terms, or any other aspect of the leasing process, please get in touch. Simply click here to access our comprehensive list of FAQs or call us on 0161 667 5338. Also, follow us on Twitter for our latest news and special offers.