What will it take to lease a car?

felyasocal · ‎09-29-2013

So after cleaning my credit for the last 6 months, there is not much else I can do, but wait.

I was able to get a car leased for my wife (with a cosigner). For some reason it still has not showed up on my reports. I know it eventually will and hopefully with time it will improve my credit.

Now, I am still very confused with all these scores and which are used for financing\leasing cars. (FICO, FAKO, Auto-Score). For some unknown reason my auto-score is a lot lower than my EQ FICO score. I keep doing my research, day and night, and I still don't understand what my actual scores are. MYFICO EQ and TU are around 670 both, then there is FICO EX which is below 600.

Can someone tell me what I should work on and what information I need to aquire and understand in order to lease another car in about 8 months. My current lease (under someone else's name) will end and I will need to either lease a new car or if that doesn't work, I can finance a slightly used car. Prefer of course to lease, but I am very, very confused as to how to get my auto-score UP there and be "elligible" for a normal lease.... Or do I just have to wait and there is nothing I can do. I just want to understand what scores are being used for auto purchases and what I can do to get the best possible score and how long might it take me?

Sorry for rambling, but I have literally been doing this day and night for 6 months. With FICO, FAKO, Vantage, Plus and all these other scores, I am simply confused and frustrated. I wasn't born here. In other counties, you don't need perfect credit. A good, stable job, good salary, and some money in your bak is enough there =)

Thank you!

Revelate · ‎09-30-2013

Pretty much any significant auto-loan underwriter will use an Auto-Enhanced FICO score; I think that's everyone for leasing as I don't know that you can get much in the way of a third party lease that would do it differently, usually it's through the manufacturer financing arm AFAIK though admittedly I've never had any interest in leasing a car so I tend to ignore it.

The problem with Auto-Enhanced is there's what amounts to a "first-time buyer" penalty where many people that don't have an auto loan or possibly other installment loan on their reports, find their scores substantially lower. Not in all cases but it seems to hold for quite a few people. There's really nothing to be done about that, other than getting some installment history on your credit report, and likely an auto loan is looked at most importantly in the metric but nobody who knows is saying what's actually in the algorithm specifically.

The other bugaboo is if you have negative history on an auto loan, that is likely a heavier weight on one's Auto scores than what you'd find here with the baseline/classic versions of the FICO algorithm found here.

So a few points, usually it's harder to lease a car from an underwriting perspective than to purchase a used one.

Secondly, what I would do assuming you're stuck in the lack of installment loan history (which a lot of people are), find a credit builder type loan from a CU or similar and either get a small CD and take out a 100% loan-to-value loan secured against that CD, or some lenders will even loan you the cash to stuff into a savings account (that you can't touch and typically at a higher interest rate than the secured route) and sit on that for six months before applying for an auto loan again.

If you have negative auto history in the past (repossession or whatever) then unless it's removed, only time passing will help since as it ages, it'll count less in the algorithm against you.

felyasocal · ‎09-30-2013

Thank you for the info!

I do have an auto loan (just leased a car for my wife through a cosigner 2 months ago). It just hasnt appeared on my credit yet for some reason. I wonder how long do I have to pay for this lease before it starts reflecting on the installment loan repayment thing?

Revelate · ‎09-30-2013

@felyasocal wrote:
Thank you for the info!

I do have an auto loan (just leased a car for my wife through a cosigner 2 months ago). It just hasnt appeared on my credit yet for some reason. I wonder how long do I have to pay for this lease before it starts reflecting on the installment loan repayment thing?

Depends on the lender but if it's going to show up on your credit report (lease for wife through a cosigner? ) it'll likely be there after the second payment I'd guess.