A co-signer can help you get approved for auto loans or leases if your credit score is less than perfect. However, leasing is generally more difficult to obtain than a car loan, even with a co-signer.
Have a co-signer for a car lease
Co-signers can increase your chances of getting new credit, including a car lease. They allow you to borrow their good credit rating, which helps you meet credit rating requirements if yours isn’t up to par.
Many lenders and lenders require borrowers with bad credit to have a co-signer before they can approve you. If you have a credit score of around 660 or less, it’s not uncommon for a landlord to ask you to bring in a co-signer to qualify for the lease.
Co-signers agree to pay for the car if you can’t, which increases your chances of succeeding in the lease. With a backpayer, there is less risk of default, which increases your chances of being approved.
Co-signers, however, take a big risk in helping you. Your co-signer does not get any rights to the leased vehicle, and if you become unable to pay, they are responsible for making your monthly payments. Their good credit is also at stake, as your payment activity impacts both your credit rating and your credit score. Because of these risks, not everyone is willing or able to co-sign.
Eligibility for a lease with a co-signer
Qualifying for a lease with a co-signer might be the way to go if you have bad credit. If you need to, a good place to start is to ask a close family member or friend to co-sign. Anyone can be a co-signer (besides a spouse) – a friend, co-worker, cousin, relative, etc., as long as they have a good enough credit rating to help you meet the requirements and sufficient disposable income to cover payments if you cannot.
Co-signers with a worse or similar credit rating to yours are unlikely to help you qualify for a car lease. The key with co-signers is to have someone with a better credit score who has proven they can manage credit well and can help catch up if there is a problem with the lease.
Keep in mind that leasing companies tend to have high credit requirements, so there is no guarantee that bringing in a co-signer will get you approved for an auto lease. Auto leasing is almost always for new vehicles and may require a higher income as well. Keep in mind that co-signers do not help you meet income requirements. If your income is what prevents you from being eligible for a lease, then a co-borrower could be the answer.
Financing a vehicle can be easier with poor credit
Leasing can be a great vehicle option, but with poor credit, you might have a better chance of getting a Certified Used Car (CPO) auto loan. These vehicles often have just been rented and are generally less than five years old. Many borrowers begin their credit repair journey or begin their credit history with an auto loan, and often with a used vehicle. Used cars tend to be less expensive than their new counterparts, and it’s generally easier for bad credit borrowers to qualify for smaller loans.
Finding a co-signer willing to help you can be the biggest hurdle you face with poor credit, whether you are renting or buying. There are, however, many lending institutions and dealerships with auto lenders who can help borrowers in difficult credit situations, called subprime lenders.
Subprime is another word for bad credit. These lenders are registered with special finance dealers and are equipped to handle many different credit situations such as situational bad credit, usual bad credit, first time buyers of cars, bankruptcy, etc. Since subprime lenders often work with bad credit borrowers, your credit score isn’t the most important factor in determining your car loan eligibility – your entire financial stability matters, too.
Building a better credit rating usually means starting with a manageable loan that has the potential to improve your credit rating with timely payments.
Find a suitable dealer
Qualifying for a lease with bad credit is not always possible. Most leasing companies have high credit requirements, and one co-signer may not be enough for an auto leasing approval. Auto loans are generally easier to obtain for borrowers with bad credit because many lenders are able to cope with credit issues.
Here has Express auto loan, we want to take the stress out of driving all over the place to find a dealership with bad credit loan options. We have built a network of dealerships that help borrowers with less than perfect credit. Our connections reach all 50 states, and it’s completely free to start looking for a dealer in your area with bad credit resources. Fill out our auto loan application form, and we’ll get to work finding a dealership for you.