Does leasing a new car lower your credit score?

I recently leased a new BMW from the dealer. I subscribe to Experian%26#039;s credit report/score service. Prior to the new lease my score was aroun 725. 2 months later it has dropped to 688. There has been no other action on my report except the new car. No other accounts and everything still on time and current. Im 20 years old so my credit history is not that long yet but I was told car financing usually brings up your credit score. Any ideas as to why it would drop this much? Thanks!

Does leasing a new car lower your credit score?

Here is the deal. Every time ANY ONE pulls your credit, that is you or a creditor, you are docked points. The only exception to this rule would be if you are a Guarantor on a loan for an LLC or something like that which would require periodic account reviews that wouldn%26#039;t doc your credit score.

Yes, the car lease MAY boost your score when you have a year or more of no late payments, etc. but to get that lease, they pulled your credit at 2-5 points. Add to that your subscription, at 2+ points a report, and you have just taken 37 points off your score.

My advice to you would be to discontinue your subscription to Experian. Unless you have a major problem with a creditor or you havea reason to be concerned about identity theft, that subscription will do more harm than good. Most states have a law that entitles each consumer to 1 free credit report every 12 months. It won%26#039;t have a score on it, but it will allow you to see what is out there.

Something else to condider is every 18 months or so pulling a tri-bureau report. They are the most comprehensive report because they are pulled from Trans Union, Equifax and Experian, the 3 most often used reporting bureaus.

It is good that you are concerned about your credit, but don%26#039;t go crazy over it either. By the way, a scoreof 688 is good. A 725 at 20 is awsome. It may all be new credit, but that is a great place to start. Keep up the good work.

Does leasing a new car lower your credit score?

WHY ARE YOU (F)LEECING A NEW CAR?????? Don%26#039;t you realize that you are paying the highest premium possible for it? Because you are only paying for the part of the car you use (however long the fleece is, typically 2-3 years), you are paying for the MOST EXPENSIVE period of owning this car. NEW cars depreciate fast - it will drop in value just by driving it off the lot. At the end of all those payments, you give the car back to the dealer! The dealer is letting YOU take the depreciation, then THEY get to sell the car and make even MORE profit!!!! If there is ANY way to get out of this fleece, do it.

Here is the best way to buy a car - save cash and buy a beater (OLD car). Keep saving what you WOULD have paid in payments for a year or two. Trade up to a newer (NEVER new) car with your trade-in and your cash. Keep putting the money in savings and in another year or two, trade up again, same way (no loan). Before you kow it, you%26#039;ll be driving a one- or two-year old BMW with NO PAYMENTS.

BTW - you didn%26#039;t really finance this car, it%26#039;s more like renting. So your credit score dropped because you are committed to this payment. If you make the payments on time, your score should go back up. 688 is still a good score, though.

Ditch the Experian service. If you%26#039;re in the US, you can get a FREE credit report from EACH of the three major agencies once each year by going to http://www.annualcreditreport.com. This is absolutely FREE - you will not be asked for credit card or bank info. The best way to keep tabs on your credit reports is to pull one report every four months from a different reporting agency.