Car Leasing Affect My Credit????

[Tonya]

Business --- When purchasing most depreciating items in the business name a personal guarantee is required. This form basically says if business fails they can in effect come to you for repayment of debt. Problem is, almost every lender records this on credit report like a coapplicant or coowner and thus effects your credit still. It does or is like to also report on Dunns/Bradstreet and this will build a history of credit for business also. The benefit to this type of lending is you can usually write off the payments as a business expense, and later if applying for additional credit most lenders will remove debt from your DTI (debt to income) ratio to benefit you.

Exactly, well put. That is why you have to deal with a loan officer that has business experience. As Killr has stated not all banks will report to your personal credit report. If done correctly it will not effect your personal DTI ratio.
I am not a big fan of people closing credit cards to increase your score. I normally suggest to my customers to lower their limits on any major credit cards (m/c, visa, discover) that they have a good payment history with, and close store cards. If you lower the limit this helps reduce your potential DTI ratio. Just make sure you never carry a balance of more than 50% of what is available. Most people recommend a balance of less than 30% of your potential credit limit available on any card. Would you agree Killr?

 

[TCB]

Kllr pointed out an unintentional error I made. I mis-typed. Instead of

"Close out old credit cards including department & company specifc cards. "
should be

"Close out old credit cards including department & company specifc cards that you don't use." As in that Best Buy credit card with a $5K line that you opened in 2001 to save 10% on that new home theater, has been long paid off and haven't used it since. You really shouldn't leave that open.

Keeping the ones that you have a good payment history with over a long period of time is good as it shows stability. However keeping those revolving debt lines open that you don't use won't do anything positive for your credit. As a former underwriter for one of the largest US Banks I can attest if a person has too much open revolving debt for the income they have it is quite often seen as a negative. I've seen people with perfect pay history but $200K in available revolving debt with scores in the low 600's and it is the available debt that is dragging them down.

Keep only those that you really use & need (i.e. do you really need that Sears or Circuit City card? Probably not). Unecessary open lines of revloving debt are simply not a good thing to have.

 

[ScottB]

your credit is a report of many things. Mostly repayment history and available but unused credit. Thus if you close a 10k credit card you are reducing the available credit to you, and you might reduce your score depending on balances (credit you used) of other outstanding sources. It is a fine art, you FICO score, and one that nobody can exactly source.

What I will remind each of you is to pay off debt quickly, and more important on time. Dont overuse credit, and when needed use it wisely. Dont allow just anyone to pull credit especially dealers and mortgage brokers that farm out the info to several sources for best price. Try to keep balances below 75% as a trade rule, but lower is better. I suggest two credit cards minimum for each person. One is general use, and thus paid off monthly no matter the balance. The second, is an emergency only card. Stick it in your panties drawer and leave it for things needing immediate attention. Mortgages, high car loans (installments), and long term CC are best reporting indicators as they show stability. Never make minimum payments, ever ! (off soap box)

 

[trhland]

your credit is a report of many things. Mostly repayment history and available but unused credit. Thus if you close a 10k credit card you are reducing the available credit to you, and you might reduce your score depending on balances (credit you used) of other outstanding sources. It is a fine art, you FICO score, and one that nobody can exactly source.

What I will remind each of you is to pay off debt quickly, and more important on time. Dont overuse credit, and when needed use it wisely. Dont allow just anyone to pull credit especially dealers and mortgage brokers that farm out the info to several sources for best price. Try to keep balances below 75% as a trade rule, but lower is better. I suggest two credit cards minimum for each person. One is general use, and thus paid off monthly no matter the balance. The second, is an emergency only card. Stick it in your panties drawer and leave it for things needing immediate attention. Mortgages, high car loans (installments), and long term CC are best reporting indicators as they show stability. Never make minimum payments, ever ! (off soap box)

ive talk with an employee from trans union credit company on the phone about leaving unused credit cards opened. they said its like a catch22 if you have lets say 3 cards on your report that your not useing it will show that you have access to credit if you need it so its good but not if you close them all out and clean up your report its not going to show credit history. so its good and bad to close them out they said

 

[trhland]

Kllr pointed out an unintentional error I made. I mis-typed. Instead of

"Close out old credit cards including department & company specifc cards. "
should be

"Close out old credit cards including department & company specifc cards that you don't use." As in that Best Buy credit card with a $5K line that you opened in 2001 to save 10% on that new home theater, has been long paid off and haven't used it since. You really shouldn't leave that open.

Keeping the ones that you have a good payment history with over a long period of time is good as it shows stability. However keeping those revolving debt lines open that you don't use won't do anything positive for your credit. As a former underwriter for one of the largest US Banks I can attest if a person has too much open revolving debt for the income they have it is quite often seen as a negative. I've seen people with perfect pay history but $200K in available revolving debt with scores in the low 600's and it is the available debt that is dragging them down.

Keep only those that you really use & need (i.e. do you really need that Sears or Circuit City card? Probably not). Unecessary open lines of revloving debt are simply not a good thing to have.

your right !!! thats what transunion rep told me.

 

[ScottB]

remember a credit report is 7 full years of past record. As such old cards that are closed do not disappear, they just cease to be available and their credit limits are removed from your total available credit. Here is some examples on closing open credit and what can happen:

Ex. total balances outstanding debt 5,000.00 , total available credit limit is 25,000.00 (five cards at 5k each max) = 1/5 or 20% of your available credit it used.

2 Ex . total balance outstanding is 5000.00 , total available credit limits is 10,000.00 (2 cards only) = 1/2 or 50% of available credit is used.

3 Ex. total balance outstanding is 5000.00 , total available credit is 5000.00 from one card only. Thus all credit is used at 100% , meanwhile you owe no more than examples one and two outstanding.

The second example actually harms you more than 1st. 3rd one harms you the most. But again, having to much available credit open can worry some lenders also as its readily available as such a fine line is there. Adding in 7 years history of great repayment reduces all of this above also, and those with FICO'S over 700 are of little significance as you are deemed credit worthy from about any entity. In the end, make your payments on time, dont bite off more than you can chew, and try to keep any/all balances below the 75% rule as possible. Closing off small department store cards after use for 6-12 months free financing is a good idea unless your only indicator of credit repayment.

 

[Darren F]

When you lease a car all it is, is another way to finance your car, so it will report to the credit bureaus the same as if you financed the car. As far as leasing or financing a car through your business' name, you are still required to provide a personal guarantee on the loan so it will reflect on your personal credit report as well.

 

[trhland]

remember a credit report is 7 full years of past record. As such old cards that are closed do not disappear, they just cease to be available and their credit limits are removed from your total available credit. Here is some examples on closing open credit and what can happen:

Ex. total balances outstanding debt 5,000.00 , total available credit limit is 25,000.00 (five cards at 5k each max) = 1/5 or 20% of your available credit it used.

2 Ex . total balance outstanding is 5000.00 , total available credit limits is 10,000.00 (2 cards only) = 1/2 or 50% of available credit is used.

3 Ex. total balance outstanding is 5000.00 , total available credit is 5000.00 from one card only. Thus all credit is used at 100% , meanwhile you owe no more than examples one and two outstanding.

The second example actually harms you more than 1st. 3rd one harms you the most. But again, having to much available credit open can worry some lenders also as its readily available as such a fine line is there. Adding in 7 years history of great repayment reduces all of this above also, and those with FICO'S over 700 are of little significance as you are deemed credit worthy from about any entity. In the end, make your payments on time, dont bite off more than you can chew, and try to keep any/all balances below the 75% rule as possible. Closing off small department store cards after use for 6-12 months free financing is a good idea unless your only indicator of credit repayment.

thanks scott dam you are noligable is there anything you dont know im going to go to you for all my problems from wax to credit issues your the man can i call you dad hey can you lend me a couple thousand i need a new wave runner take care thanks again for taking the time to help me out.


tom

 

[ScottB]

As you dad I will need to remind you money does not grow on trees, and thus a wave runner (like a boat) is a bad investment. Beat on your friends, even rent one as needed, but dont spend money on depreciating items !

My day job is growing Small Business owners, into wealthy big business owners. I also work to explore weath and retirement options for the individual. Back in school I was the class clown, who knew ?!?

 

[trhland]

As you dad I will need to remind you money does not grow on trees, and thus a wave runner (like a boat) is a bad investment. Beat on your friends, even rent one as needed, but dont spend money on depreciating items !

My day job is growing Small Business owners, into wealthy big business owners. I also work to explore weath and retirement options for the individual. Back in school I was the class clown, who knew ?!?

i was just kidding about the wave runner my friends have them and hardly uses them. by the way scott what do you do for a living i know you work for a/g just courious.

 

[Tonya]

Stick it in your panties drawer and leave it for things needing immediate attention.

Class clown in school! It still shows at times. You crack me up, you are so serious, then BAM, the class clown comes out. Im the MAN :awesome:

 

[ScottB]

i was just kidding about the wave runner my friends have them and hardly uses them. by the way scott what do you do for a living i know you work for a/g just courious.

AG is just part time consulting work .... I truly love the hobby and Capt Max gave me the opportunity to enjoy it at my pace and help him grow PBMA thru its subsidiaries.

My daytime work has been with one of the largest financial institutions in the US as a Licensed Small Business Specialist. I also carry both Insurance and Securities Licenses for the benefit of my clients. Over the last 18 years since HS, I have held about every position in the Retail Bank and many behind the scenes also. I love money and found everyone needs it to survive, most just dont know how to use it properly.

 

[trhland]

AG is just part time consulting work .... I truly love the hobby and Capt Max gave me the opportunity to enjoy it at my pace and help him grow PBMA thru its subsidiaries.

My daytime work has been with one of the largest financial institutions in the US as a Licensed Small Business Specialist. I also carry both Insurance and Securities Licenses for the benefit of my clients. Over the last 18 years since HS, I have held about every position in the Retail Bank and many behind the scenes also. I love money and found everyone needs it to survive, most just dont know how to use it properly.

gotcha thats cool.