topic Re: Add 18 yo to lease to build credit? in Auto Loans

Add 18 yo to lease to build credit?

Anonymous — Sun, 29 Mar 2009 01:37:19 GMT

Hi All,

We leased a new Mazda for our daughter when she turned 17 and it is in my name. The deal we struck was that she was responsible for the payment after we put down a sizeable down payment to allow her to have a low monthly payment. However, we are now realizing as you will see under my next message on this board that once the lease is up she will have not gained any of the fico score benefits and won't be able to get a car loan on her own without a co-signer.

I called Mazda today and asked if I could add her name to the lease and they were absolutely fine with it (she is almost 19 now) with one year left on the lease. Two questions- does anyone know if this will actually help her when this lease is up to purchase or lease on her own?

Second and as important will this affect my credit score in ANY way?

I don't want to do anything stupid.

Message Edited by learningfico on 03-28-2009 06:37 PM

Re: Add 18 yo to lease to build credit?

Anonymous — Tue, 31 Mar 2009 06:23:19 GMT

It is better for you to contact Mazda, but I will tell you what I know.

Hearing that you can add her into the lease in the middle of the lease term is weird to me. Anyways, if she can be added into the lease, this should help her as it would show on her credit report after she has been paying for the loan/lease for a long period of time. (but one year left on the lease might not be considered long enough to show her effort on paying for a lease/loan). At least I heard from many that it requires 12+ consective months to be considered beneficial contribution.

Re: Add 18 yo to lease to build credit?

Anonymous — Tue, 31 Mar 2009 10:08:51 GMT

Thamks...that's why I want to do it now- we have exactly 12 months left........I should have done it before but didn't think of it...frankly I was surprised that Mazda said yes, and frankly wondered if there was a catch or if possibly the woman didn't understand what I was asking? The paper work will be here this week, I'll get a better feel at that time.

I'll find out I guess..thanks again

Re: Add 18 yo to lease to build credit?

Anonymous — Tue, 31 Mar 2009 12:14:58 GMT

Normally auto financing/leases don't allow for the inclusion or removal of a borrower after closing.

However, if you finance company is willing to add her into the "existing" lease, then she would gain the benefit of the entire lease period. Example, if this is 36 month lease, you have made 24 payments, she is added for last 12.

If this does not create a "new" lease/loan, then the existing account and history will be reported to her credit, similar to that of an "authorized user" on a credit card. This would help her credit, as it would report as "joint" responsibility and future lenders would consider this a credit reference and FICO would use it toward her score.

If this creates a new 12 month lease, the she will not gain the benefit of past payments, but would be reported for the remaining lease payments. Since this is an unusual auto lease/loan exception they appear to be making, be sure to post your results for everyone.