Deciding between leasing a used car or a new car and taking out an auto loan can be a difficult decision. In the end, what you decide to do might be based on your financial situation and your credit score. If you are looking to lease a pre-owned Lexus to improve your credit score, will that work for you? Here at Keyes Lexus of Valencia, our Lexus finance experts are here to help answer all your financing, credit, and lease-related questions.
How Leasing Can Improve your Credit Score
If you’re wondering how leasing a pre-owned Lexus can affect your credit score, the good news is that car leases, whether on a new or pre-owned Lexus, can improve your credit score, if handled correctly.
Auto loans and leases are both known as installment loans, which is a type of loan with a set monthly payment over a set amount of time. Taking out installment loans can help build up your credit score, as long as you keep up on your monthly payments because the largest factor making up your credit score is payment history.
A lease term is typically two to three years long. Good marks from paying back your lease payments on time can remain on your credit reports for up to 10 years. So the important thing to remember is that even though your lease term is only a few years, whether or not you paid your payments on time stays on your credit report for much longer.
We offer pre-owned Lexus leases here at Lexus of Valencia, and our finance experts are happy to explain exactly how they work.