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Regular Contributor
ccubedzx3
Posts: 171
Registered: ‎04-30-2012

Going from a higher payment buy, to a lower payment lease, and affects on credit. What to do?

We currently have a 2007 Saab 97x that we owe about 11,000 on, with a payment of $415/month.   We want to trade it in to lease a Dodge Journey so we can have a smaller payment, and it would be better on gas.   In doing this, our DTI would be better because of the lower monthly payment, but I am scared to do another credit pull because of how it would affect the fico score.   Is getting a better DTI worth losing a few points over? Thanks in advance!


Starting Score:5/22/10 590
Current Score: 6/11/13 670
Lender Mid Score: 6/11/13 670

Goal Score: 700


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Valued Contributor
HoldingOntoHope
Posts: 1,057
Registered: ‎09-29-2009

Re: Going from a higher payment buy, to a lower payment lease, and affects on credit. What to do?

It would all depend on what you are trying to accomplish. If reducing the payment is the primary goal then your choice would be to refinance your current loan or accept a new transaction on a different vehicle. There is no way to accomplish that without a credit check and a new account. Both of those are going to impact your FICO score. If your concern about DTI is because you are applying for a mortgage then I would suggest you speak with your mortgage rep before initiating any new accounts. If your that close to the edge it may not be a good idea anyway.

 

And also if your scores in your signature are correct you may have a difficult time qualifying for a lease. Strangely enough it requires better credit to qualify for a lease than a purchase.

Best financial advice I ever got: "Just imagine what an adult would do and do that."

Starting Score: 500's
Current Score: EQ 701 (FICO) TU 721 (FICO) EX 715 (Quizzle)
Goal Score: 760 ALL


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Super Contributor
marty56
Posts: 5,679
Registered: ‎10-06-2007

Re: Going from a higher payment buy, to a lower payment lease, and affects on credit. What to do?

based on the new payment, if you have CC debt, you can use the extra money to pay it down which might cause a net increase in your FICO score even if you get a temporary hit for the INQ and or new account.  IMHO I would do it since your payment will go down and you would save money on gas.

09/12/2013 FICO: EQ: 772 EX:813 TU:752
Regular Contributor
ccubedzx3
Posts: 171
Registered: ‎04-30-2012

Re: Going from a higher payment buy, to a lower payment lease, and affects on credit. What to do?

What I should of added was, it would be in my wifes name.  She has a 643 mid score. Would that qualify for a lease? Maybe we are better off just waiting and getting the house figured out and funded first, then move on to getting a different car.  Thanks for the input guys! I think we will probably wait it out!

 


Starting Score:5/22/10 590
Current Score: 6/11/13 670
Lender Mid Score: 6/11/13 670

Goal Score: 700


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Community Leader
Valued Contributor
HoldingOntoHope
Posts: 1,057
Registered: ‎09-29-2009

Re: Going from a higher payment buy, to a lower payment lease, and affects on credit. What to do?

If your home purchase is within the 6 - 12 months I would definitely hold off. Read up on the mortgage board for advice.

Best financial advice I ever got: "Just imagine what an adult would do and do that."

Starting Score: 500's
Current Score: EQ 701 (FICO) TU 721 (FICO) EX 715 (Quizzle)
Goal Score: 760 ALL


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Mega Contributor
Creditaddict
Posts: 18,928
Registered: ‎10-23-2007

Re: Going from a higher payment buy, to a lower payment lease, and affects on credit. What to do?

You might not loose any points for an INQ... and even IF you do, they usually come back in 6-12 months....

You also have to keep in mind "Most" likely the dealer is going to pull "Auto Enhanced Fico" which you have no access to getting before they pull and tell you.

But if you are in that 640 range I would not think you would have issues with the lease approval, but you may not be tier 1... just depends what they do, which could then effect expected payment on lease if not in top tiers with them.

What is the lease special advertised?

Are you looking for that exact model or want some other options?

Are you upside down on current car?

Do you have CarMax?  My partner ended up trading in at Carmax instead of dealer based on offer, I'm going to be doing the same... it makes numbers much simpiler when you are not dealing with a car to trade, especially when you are upside down!

Fico Scores: EQ 657 Cabelas, TU 665 GE, EX 699 Wells (07-27-14)
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