Can I Lease a Car With a 500 Credit Score? (Yes or No)

Can I Lease a Car With a 500 Credit Score

Can I lease a car with a 500 credit score? You may find it difficult to lease a car with a 500 credit score because it falls within the subprime range. Therefore, leasing companies may not approve your car leasing because of the 500 credit score except you can prove how substantial your income is to them.

In the United States in recent times, your credit score means everything. It is the differentiating factor between hundreds of thousands of people in America.

Your credit score determines the kind of school you attend when you try to further your education, it determines the kinds of loans you have access to, it determines the kind of credit facility available to you, it even determines whether you get the job as employers like to look into your credit score to ensure that they are employing someone whose finances are in order.

In the same light, it determines who goes into business with you, the kind of contracts you can receive, etc. Your credit score is everything. This is why loan sharks and credit companies threaten your credit score if you default on a payment you are supposed to make.

Also, since the credit score is a determining factor of a lot of things, it determines whether you can lease a car. Credit score has different ratings, and your rating determines the kinds of financial benefits or opportunities that are available to you. Do you have a credit score of 500 and you are wondering whether it is enough to lease a car? Well, let’s see.

What is a Credit Score?

A credit score speaks to the creditworthiness of an individual. It is a number generated based on the investigation of a person’s financial life, credit history, credit files, etc. that make up the credit report of that person.

The information that is used to compile documents for investigating and coming up with a person’s credit score is usually gotten from the credit bureaus.

Say you want to lend some money from a bank, or a loan company for a business. The very first thing they do is search for your credit details from the credit bureau to analyze your credit score and then based on your credit score, they determine whether it is financially wise to grant you the loan.

To them, your credit score tells a whole lot about your ability to pay back the loan you want, with their required interest. If your credit score is good enough according to their standards, then you get the loan. If not, sorry, next time!

As stated earlier, many organizations use the credit scores of individuals as a deterministic factor to make decisions.

Commercial banks and loan companies use it to ascertain whether it is wise to lend you money for business, employers use it to determine whether it is safe to employ you into their organization, insurance companies use it to determine the amount of premium you will pay, landlords use it to determine whether to go into a contract with you, and many others.

It is a huge part of our society today. Many people even use it to determine who they build relationships with!

Credit scores are classified in different ranges. Experian classified credit scores into five different classifications according to how high a credit score is. According to them;

  • A credit score between 781 and 850 is Super Prime
  • A credit score between 661 and 780 is Prime
  • A credit score between 601 and 660 is Non-Prime
  • A credit score between 501 and 600 is Sub-Prime
  • A credit score between 300 and 500, which is the lowest credit score classification, is Deep Sub-Prime

As someone whose credit score falls in the lowest credit score classification, can you lease a car from a leasing company?

Can I Lease a Car With a 500 Credit Score?

Leasing a car, or getting any type of lease in fact, with a credit score as low as 500 is hard. Not impossible, just hard. So yes, you can lease a car with a credit score of 500. There are only a few options available to you to lease a car if you have a credit score as bad as 500.

Leasing a car with a 500 credit score is as hard as trying to pass a thread into a tiny needle’s eye, but not as impossible as trying to pass a camel through the eyes of a needle.

It takes a lot of work to convince a leasing company that you can pay your loan, or pay up the vehicle lease and meet their requirements even with your bad credit score, but once you can convince them, then you can get the lease. It all depends on your negotiation, the policies of the leasing company, and how able you are to convince them you will pay up.

The one thing that can convince a leasing company that you can meet the requirements of your lease is proof of a substantial and consistent income. This is if you are lucky enough to get the leasing company interested in having a dialogue in the first place.

This means ultimately that if you search hard enough, and are convincing enough, you will find a leasing company that can lease a car with a 500 credit score. Also, you should note that there are very limited options of cars you can lease with a credit score as low as 500.

What is the Minimum Credit Score for a Car Lease?

The minimum credit score for a car lease is 620 to 739. According to NerdWallet, with a credit score of 620 and above, you should have absolutely no problems or setbacks when trying to lease a car. Problems arise when you are trying to lease a car with a credit score lower than 620.

You might eventually be offered the car lease, but you won’t avoid the questions that would be asked by the leasing companies. Some will reject your request for the lease instantly once your credit score is not up to the required credit score for leasing a car.

What Kind of Car Loan can I get with a 500 Credit Score?

You have a higher chance of getting a used car loan with a bad credit score than you have getting a new-car loan.

A survey was done by the Experian State of the Automotive Finance Market, and they made a report that ultimately states that there is a very slim chance, approximately twenty-one percent (21%) chance of getting a car loan with a credit score of 500, but the type of car loan you have that percentage chance of getting is a used-car loan.

If you are looking for a new-car loan with such a bad credit score, your chances drop to 13.97%, from 20.67%.

This means that if you want a good chance of getting a car loan with a bad credit score, you should look to getting a used-car loan because your already slim chance becomes slimmer if you are trying to secure a new car loan with a 500 credit score.

Can You Get a Car Loan with a Credit Score of 450?

A credit score of 450 is a very bad credit score. An individual with a credit score of 450 is considered a loan risk and a bad credit person by financial institutions, organizations, lenders, and general users of credit score information.

It is very expensive to try to qualify for a car loan with a credit score of 450, but there are dealers such as Buy Here Pay Here dealers that offer bad credit individuals with car leases.

They require that the lease delivers monthly payments according to his or her budget. If you can meet this requirement, then your credit score will be a non-issue.

How to Lease a Car with a Bad Credit Score

There are several ways to improve your chances of getting a car loan approval even with a bad credit score. Some of them are explained below:

1. Make an Initial Down Payment

This helps plead your cause to the lender and shows that you are very committed to paying the car lease. If you put down a high percentage of the fee at the initial payment, it will reduce the amount of money you have to pay periodically.

2. Try to Lower your Debt-to-income Ratio

Your debt-to-income ratio is calculated as your monthly payments of debts divided by your monthly income. If you have bad credit, your aim should be to reduce your debt-to-income ratio, and when you do this, it’s a sign to the leasing company that you are no longer a high-risk person, as it shows you are working on your credit score.

3. Get a Guarantor

A guarantor is a co-signer, and such a person must have a very good credit score. Having this person sign together with you reduces risk on the part of the leasing company as he or she is equally responsible for whatever happens with the car lease. You can check out which car rental companies let you drive out of state.

Final Thoughts

Although you should do everything you can to improve your credit score, as it will certainly affect other opportunities and options, not just your ability to access a car lease, it is paramount that you are armed with the right information. With a credit score as bad as 500, you can still lease a car. Your options will be limited, but there will be an option if you search long enough.