Want to upgrade your home but can’t take equity loans or use credit cards? No worries, you can opt for lease purchase solutions without a high credit score. Plus, you can increase your credit score with lease-purchase solutions.
Want to know how? Here you will get to learn it. But, before that, let’s discuss the lease-purchase agreement. Keep reading.
What is a Lease Purchase Agreement?
A lease purchase also called a lease-to-buy/lease-to-own, is a legal agreement in which you can lease furniture, home appliances, jewelry, and other tangible assets in return for a payment in installments. You get the option to buy the leased assets any time during the ongoing agreement period.
If you go for lease-purchase solutions, you must determine and settle the buying price before signing the contract. A lease purchase can be a great choice to boost your credit score. This purchase solution also allows a flexible payment term; thus, you can pay back at your convenience.
The payment term can be even 24 months, which is quite a long period to pay back the dues. As your credit score increases, you get more lucrative deals. Lenders tend to offer higher interest rates to people with higher credit scores; thus, you need to pay less over the loan tenure. When you have a higher credit score, you can also apply for more types of loans. Thus, you should always aim for a minimum 630 credit score.
Let’s discuss how you can increase your credit score with lease-purchase solutions.
How Can Lease Purchase Solutions Help in Boosting Your Credit Score?
Follow these tips and tricks that you should follow to do so:
Include a Stipulation to Your Contract
Add a condition to your contract about a credit agency notifying the credit bureau about payments. The timely notification will help to pay on time and increase your credit score. When you pay via check when required, it documents everything that protects you from fraud.
Pay Off Huge Debts and Create a Savings Account
Start with building multiple credit lines. Pay your massive debts and create a savings account in your rent-to-own agreement period. The savings account needs to be capable of helping offset the future closing.
Pay Monthly Expenses on Time
Ensure you pay all your expenses on time every month. If you miss a single payment, it can decrease your credit score by approximately 110 points, making it tough to recover later.
As a lease purchase solution may not directly boost your credit score, you need to take intelligent steps to do so. Follow the tips above to increase your credit score at the end of a lease agreement. Breeze Lease Purchase can always help you to upgrade your home or buy the desired furniture and boost your credit score by offering easy and flexible lease purchase options and credit solutions. Contact us today to share your requirements so we can provide you with the right lease purchase solution accordingly.