If you’re thinking about leasing a vehicle, you’ve probably wondered how it might affect your credit score. The truth is, leasing—just like financing—can have an impact, depending on how you manage your payments and credit usage. In this post, we’ll break down what you need to know about leasing and credit, so you can make an informed decision.
How Leasing Shows Up on Your Credit Report
- Leasing is considered a form of credit, so it appears on your credit report like a loan.
- Lenders report monthly payments to credit bureaus.
- Your payment history and account balance are both tracked.
Positive Impacts of Leasing on Your Credit Score
- On-time payments help build your payment history (the biggest factor in credit scores).
- A lease can improve your credit mix—having different types of credit looks good to lenders.
- A well-managed lease shows financial responsibility.
Potential Downsides to Be Aware Of
- Missed or late payments can hurt your score.
- Leasing increases your total debt load, which may affect credit utilization.
- Applying for a lease can trigger a hard credit inquiry (a small, temporary drop in your score).
Tips for Keeping Your Credit Healthy While Leasing
- Always make payments on time (set up auto-pay if possible).
- Don’t overextend your credit with multiple large obligations.
- Check your credit report regularly for accuracy.
Conclusion: Leasing Can Help—or Hurt—Your Credit
Leasing can be a positive move for your credit score if managed well. Like any form of borrowing, it’s all about making payments on time and staying on top of your financial commitments.
How Birchwood Can Help
Whether you’re exploring leasing for the first time or want to better understand how it fits your credit profile, Birchwood is here to help. Our team will walk you through your options, explain how leasing works, and support you in making a confident, credit-smart decision.
Visit birchwood.ca to learn more.
