Will leasing a car improve my credit score?

Leasing a car may not directly impact your credit score. However, it can influence your credit utilization ratio, which makes up 30% of your FICO® Score. Leasing a car often requires a lower down payment compared to buying a car. This can result in a lower balance on your credit card, leading to a lower credit utilization ratio. Consequently, your credit score may improve.

However, it is important to manage your car lease responsibly. Make all your lease payments on time and avoid going over your lease mileage allowance. Late payments and excessive mileage charges can negatively impact your credit score.

Additionally, if you decide to purchase the car at the end of the lease term, the lease may convert into a loan, which can influence your debt-to-income (DTI) ratio. A high DTI can negatively affect your credit score.

It's worth noting that your credit score can be affected by various factors, so leasing a car may not have a significant impact if there are other outstanding issues in your credit history. Building a strong credit score involves responsible financial habits and management of your overall debt and payment history.