A credit check is an important part of every car lease application. It helps us make an informed decision about whether a car lease is a suitable option for a customer, considering factors such as their financial commitments and borrowing history.
While all leasing providers carry out credit and affordability checks, having bad credit isn’t always the be-all and end-all. Your credit score, although valuable information, is just part of the picture. We take into consideration other contributing factors such as your current financial situation, employment, and ability to afford the monthly payments as part of our qualification process.
Importantly, we know that nobody likes to feel like a number in a system; that’s why our sales team assess every application individually in-house. Rather than relying solely on a credit score, our team considers your overall circumstances to determine whether a monthly car hire is the most suitable option for you.
While a poor credit history doesn’t necessarily mean you can’t lease a car, it can affect the outcome of your application and it’s important to bear this in mind.
Bad credit car leasing
Let’s talk about what exactly we mean when we say, ‘bad credit’.
Your credit score is a number rating that helps lenders to assess how reliable you are when it comes to borrowing and repaying money. Every move you make financially has an impact on your credit score, from taking out a phone contract, to credit card payments and opening bank accounts.
Generally, the higher your score, the more likely you are to be approved for credit and access higher lines of credit. Examples of bad credit would be
- Missed or late payments
- Defaults on loans or credit cards
- County Court Judgments (CCJs)
- High levels of existing debt
- Frequently opening bank accounts
- Bankruptcy
But just because a person has a low credit score doesn’t necessarily mean that they are bad at making payments. Some people who are very good with money have some of the lowest scores, simply because they have never borrowed money, or used financing options. Without a track record of borrowing and repaying credit, lenders have less information to go on.
If someone has very little borrowing history and suddenly wanted to start a 12-month vehicle lease, it can be difficult for lenders to assess how reliably they would make repayments, considering they’ve never demonstrated they can in the past.
That’s why we like to qualify each of our customers on an individual basis, considering your current income, employment status and monthly commitments as well as your credit score.
What we look at when you apply for a car lease
Each time someone applies for a lease, it’s our responsibility to assess whether monthly car hire is the right option for their circumstances. To do this, our team carries out a series of checks that help us make an informed decision while ensuring the monthly payments are affordable and manageable for you.
- Your identity and address – to verify your details.
- Your income and expenditure – to assess whether the lease is affordable.
- Your overall financial circumstances – rather than relying solely on your credit score.
Because we underwrite our contracts in-house, every application is assessed individually by a human. This means a low credit score doesn’t automatically mean your application will be declined. It may be if you have bad credit or thin credit that your application falls into a ‘grey area’ in this case we may ask for a refundable security deposit. This deposit is held on your account and returned in full at the end of the lease, provided there are no outstanding charges.
Most applications receive a decision within 24 working hours. If you’re approved, there’s no obligation to proceed with the lease, but the option is available to you.
How to improve your credit score before applying
If you know you have a bad credit score and are concerned your application may be rejected, improving your credit score before applying may increase your likelihood of being accepted and give you access to more monthly car hire options. Moves you can make to help raise your credit score include:
- Keep up with payments
- Reduce existing debt
- Avoid multiple applications
- Consult a credit repair company
- Register to vote
Your credit score is updated around once a month when banks, credit card providers and lenders report to the credit reference agencies, so it can take four to eight weeks to see any movement in your credit rating. Although lenders all have their own credit check processes, you can get a good idea of your current score using companies such as Experian, it’s free to check and won’t damage your credit score by doing so.
Is a credit check required?
Yes, even if you are only looking at a 1 month car lease, a credit check is required.
We appreciate that credit checks can be uncomfortable however as we are entering into a legally binding contract, we have a responsibility to carry out checks before approving the contract.
Lease with confidence
Having bad credit doesn’t necessarily mean you have to put your car lease plans on hold. At Flexed, every application is reviewed by real people who take the time to understand your situation. We look at more than just a credit score and will always be happy to talk through our decision, answer your questions and recommend a suitable lease term for your circumstances whether that be a short term lease, a security deposit or more affordable model.
Remember our aim is simple: to help you find a car you can enjoy, without the stress of taking on payments that don’t fit your budget. Your lease car should open the door to freedom and adventure, not leave you carrying the stress of unaffordable monthly payments.
So can you lease a car with bad credit? Let’s take a look, we’ll be happy to discuss your circumstances and help you understand your options. Give us a call on 0800 311 8290 and we’ll be happy to talk you through it all.
