Can Rent to Buy Cars improve your Credit Score?

Many people opt to choose rent to buy vehicles because of a bad credit history or previous bad experience with credit. It is often not part of their thinking or planning that opting to enter into a rent to buy contract could in fact, improve their credit score. At Future Motor Lease , we are happy to report that rent to buy agreements can in fact improve a poor credit score, and here is how:

Does rent to buy leasing actually build my credit score?

It absolutely can! When you enter into a rent to buy contract, you are usually agreeing to pay a monthly fee for the rental of the vehicle between 24 – 60 months, which in effect means you are agreeing to pay a fixed monthly fee for that duration. You will be able to build or rebuild your credit score by sticking to those payments and never missing one. Over time, your credit score will significantly improve.

Can rent to buy contracts potentially hurt my credit score?

Of course, in the opposite to what we have said above, if you enter into the contract and for whatever reason, skip or miss a few payments, this can potentially lower your credit score. By making regular, on-time payments you will never need to worry about this however.

Don’t rush to pay your rent to buy contract off too early

By paying your rent to buy contract off, it effectively means you’re rushing to close your account. When it is closed and even though it might be paid off and you don’t have to make regular payments any more – it also means that the Credit Bureau won’t be able to account for regular, on-time payments which means they can’t give you an effective credit score. This could negatively impact or lower your credit score over time.

If you want to improve or rebuild your credit score, the best course of action is to consider a rent to buy option rather than a straight out car purchase. The contract, and the paying of regular monthly rental fees, will help to build your credit score and get you out of the red once again.

For more information on rent to buy vehicles, chat to the experts at Future Motor Lease now or call us on 011 026 0003.