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Why Lease-Purchase Solutions Are Better for Your Credits Score

Credit Report with Score rating app on smartphone screen showing creditworthiness of a person for loan and mortgage application based on payment history and debt usage, budget management performance

It can be difficult to make upgrades to your home when you do not qualify for home equity loans and are not in a position to use credit cards. In these cases, lease-purchase solutions might be your best option. Not only do you not need a high credit score to qualify for purchase solutions, but they might also be better for your credit score in the long run. Keep reading to learn why.

Understanding Lease-Purchase Contracts

Lease-purchase, also known as lease-to-own or lease-to-buy, is a legally recorded contract in which tangible properties, such as furniture, consumer electronics, home appliances, and jewelry, are leased in return for a weekly or monthly payment. A lease-purchase solution differs from the conventional lease in that you have the option to buy out the leased item at any point during the agreement term.

If you’re choosing lease-purchase solutions, you’ll first need to figure out the purchase price and lock it in before you sign the contract. For people who lack any credit history or have a poor credit score, lease purchase is an excellent opportunity to improve your credit score. Moreover, these purchase solutions also have the added benefit of a flexible payment term, allowing you to pay back in a relaxed manner, sometimes even stretching over 12 to 24 months.

Simply put, a lease purchase provides you with the opportunity to improve your credit score over time. The better your credit score, the better loan deals you can get. Lenders are also more likely to offer better interest rates to people with good credits, which means you will pay less over the course of the loan. Also, the higher your credit score, the more loan types you’ll be able to apply for. So, as a rule, always aim to have a credit score of at least 630.

How Lease-Purchase Solutions Can Improve Your Credit Score

Add a stipulation in the contract requiring the credit agency to notify the credit bureau about your payments. This way, you can improve your credit score by making payments on time. Pay with a check whenever possible so there will be a clear payment trail, and everything will be documented. This also has the added benefit of keeping you safe from frauds.

Remember, a lease-purchase solution does not directly improve your credit score. Instead, it’s the steps you take during the lease period that will make a difference. Establishing multiple lines of credit is a good start. Pay off any large debts you have and start a savings account during your rent-to-own agreement period. This account should be able to help offset the closing charges you’ll have to pay in the future.

Above all, make sure you pay all your expenses on time each month. A single missed payment can lower your credit score by up to 110 points, which can be very difficult to correct in the future. If you follow the steps carefully, your credit score should be in good shape at the end of your lease agreement period.


At Okinus Credit Solutions, we are committed to helping customers buy the products they need when they need them while also rebuilding their credit scores. To learn more about our lease-purchase programs, fill in our application online or call us at 844-450-0221

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