What’s the Minimum Credit Score to Lease a Car in Canada?

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    Leasing a car in Canada is a great option for those looking for a long term car rental. It might also be a good alternative to buying a new car with financing. However, it’s important to be aware that your credit score could impact your chances of being approved for a lease on your dream car.

    While there is no official minimum credit score required to lease a car in Canada, in practice the expectations will vary by dealership. Generally speaking you’ll want to have at least a score of 620 to secure a car lease without trouble. Keep in mind that 660 is the lower threshold for a “good” credit score rating in Canada. If your credit score is lower than that, fear not – you can still land a lease on a new car. 

    The catch is, you’ll have to shop around a bit more, as well as potentially pay a higher interest rate.

    What Credit Score do I Need to Lease a Car?

    When it comes to leasing a car in Canada, your credit score can potentially play a vital role. If you’re hoping for the application process to go without a hitch, ideally your credit score will be at least 620. Because of its significance, it’s essential to regularly check your credit score. Maintaining a good credit score is not only crucial for securing a favorable deal on a car lease, but it’s also used by insurance companies to determine the pricing of your car insurance premiums.

    With a credit score below 620, you’re likely to pay more on both a down payment and the lease payments themselves. Dealerships will look to increase the premium on your lease terms if your credit score is low, in order to lessen some of the risk they’re taking by leasing you a car.

    Just how much more you’ll pay, both up front and for each month of your lease, will depend on your credit score, your dealership, and the value of the car you want to lease. 

    How Do I Get a Car Lease with a Bad Credit Score?

    Even with a credit score below 600, you can still find dealerships willing to work with you. However, when your credit score there are steps you might need to take in order to still find a good deal. 

    Below we’ll run through some of the things you can do to improve your chances of getting a car lease with bad credit.

    Use a Co-Signer

    One of the most effective ways of improving your options is to find a co-signer. A co-signer is essentially a friend or associate with a strong credit score who is willing to let you ‘borrow’ their good credit standing on your lease agreement. In doing so they agree to help you pay any debt accrued in the event that you fail to make the lease payments.

    Most lenders are very open to co-signers, however as with any detail here, this may vary between dealerships. Generally speaking, a co-signer with a great or excellent credit score will make it much easier for you to land a car lease with a competitive interest rate. If this is an option for you, it could save you a significant amount of money in the long term.

    Increase Your Down Payment

    Another way to increase your chances of being approved is to take on more risk by putting up a larger down payment. By lowering the risk that the dealership takes on, you become a more attractive borrower.

    Making a larger down payment can also benefit you in the long term, as it could help you land a lower interest rate as well as a more manageable monthly payment.

    Take Over an Existing Lease

    Taking over an existing lease might be an option for you, in which case you could land much better term agreements compared with taking on a new lease. If you know someone who needs to break their lease deal early, you could agree to have their lease transferred to you. 

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    While there is likely to be a transfer fee, you could still save money overall on the monthly payments. Plus you won’t have to worry about a down payment.

    Negotiating Lease Terms

    When you’re shopping around for a car lease with bad credit, it’s important that you’re able to negotiate well. Sure, you may have a low credit score, but that doesn’t mean you can’t be well informed and confident.

    It helps to do your research and get a good picture of what you can reasonably expect, given your credit standing. Some lenders might try to take advantage of your low credit score, so it helps to know what to expect before you shop around.

    If you can, seek out a few quotes from multiple dealerships and use that information when negotiating. And always be prepared to walk away if you feel like you’re not getting a fair deal.

    What Are the Pros and Cons of Leasing a Car?

    Regardless of your credit score, it’s worthwhile to consider the many pros and cons involved in leasing a car.


    • Lower down payment compared to conventional car financing
    • Lower monthly payments compared to a car loan
    • Cheaper repair costs thanks to vehicle warranty
    • Short-term lease commitment
    • More affordable way to drive a new car


    • You won’t own the vehicle at the end of the lease
    • Potential end-of-lease fees and other costs
    • Limited mileage restrictions
    • More expensive over the long term than financing a car to own

    How to Improve Your Credit Score

    Before you go searching for a bad credit car lease, it’s vital that you assess your credit standing and see if there are any steps you can take to improve your credit score quickly. 

    While you may not want to wait, taking a little time to boost your score could have a huge impact on the type of car lease you can land. But how do you increase your credit score?

    Make Payments On Time

    The number one biggest factor in how your credit score is calculated is how you manage your debts. If you have late payments, making it a priority to pay your bills on time could improve your score quickly. Even six months of on-time payments can make a difference.

    Lower Your Debt-to-Income Ratio

    The second most important factor for your credit score is your debt-to-income ratio. Paying off your credit balances, and doing all you can to reduce your outstanding debts, is a core tactic you can use to improve your score.

    Lower Your Credit Utilization

    The more of your available credit that you use, the higher your credit utilization ratio will be. Lenders prefer borrowers who don’t use all of their available credit consistently. Work towards paying down any balances until you’re only using about one-third (or less) of your available credit balances.

    Search for Errors in Your Credit Report

    It is always possible that there are inaccurate negative items on your credit report. If you’re surprised by how low your credit score is, even after trying to improve it for a while, you might want to check your report. 

    You can dispute any potential errors you find with the relevant credit bureau. Or you may instead choose to hire a credit repair specialist to help you. In any case, this could lead to a quick improvement in your credit score.

    Use a Credit Building Card

    You might also consider signing up for a credit card that is designed to help you rebuild your credit. This will be particularly useful if you’ve got no or little credit history in Canada, and could allow you to build a strong credit score within a matter of months.

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    Further Tips on Bad Credit Car Lease in Canada

    Consider Your Vehicle Choice

    When you’re looking to lease a car with bad credit, don’t overlook the type of vehicle you choose. You’ll have to be realistic about the expectations you’ve got, and remember that the lower your credit score is, the less likely you are to be able to lease a top-of-the-line new car.

    When it comes to choosing a car to lease, there are certain things to look for. First of all, you might want to go with lower-cost cars, or older models. The less expensive a car is, the better your chances of leasing it with good terms will be.

    It’s also worth considering fuel efficiency, as this can also save you money in the long term, and will affect your overall expense. Finally, cars that are known to cost less money on maintenance will be a smarter choice.

    Be Prepared for Additional Costs

    When leasing a car with bad credit, you will encounter additional costs. While many fees are common, a bad credit score might mean you’ll have to pay more than those with better scores.

    For example, there will be fees in your lease agreement related to excess mileage, any modifications made to the vehicle, as well as excessive wear and tear to the car. Also, details like acquisition fees, security deposits and early termination fees will likely be administered at a higher cost if you’re leasing with a bad credit score.

    The most important thing to remember is that being aware is the best defense you have against unexpected fees. Know the circumstances under which certain fees are applied, and you’ll be best prepared to avoid them.

    Seek Professional Guidance

    No matter what your circumstances are, seeking out professional financial help is always an option. Financial advisors or credit counselors could offer you genuine guidance and help you to establish a practical way forward. 

    If improving your credit score seems a daunting task, then professional help may be a good option for you. Just be sure to look for those with professional certifications, good reviews and manageable costs that won’t lead you into further financial difficulty.

    FAQs About The Credit Score Required to Lease a Car in Canada

    What credit score is needed to lease a car?

    While there is no minimum credit score needed to lease a car in Canada, generally speaking you’ll want a credit score of at least 620 to obtain a lease without any difficulty. A credit score of over 700 is ideal for leasing a car, and will give you access to the best terms available.

    Can you lease a car with bad credit in Canada?

    Yes. In Canada, you can lease a car even with bad credit, however it may be more challenging as you’ll face higher interest rates, larger minimum down payments and more restrictive terms.. 

    Does leasing a car help me build my credit?

    Yes. Leasing a car and successfully paying off your monthly bill will help you build your credit score. Just make sure to pay in full and on time.

    Can I lease a car with a 650 credit score?

    Yes. In Canada a credit score of 660 is usually considered good, so a score of 650 is decent and should make it relatively easy to lease a car. 

    Can I lease a car with a 600 credit score?

    A 600 credit score in Canada is below average. It could be difficult to lease a car with this credit score, however you may find a dealership willing to lease with a much higher interest rate and down payment.

    Can I lease a car with a 500 credit score?

    While there is no official minimum credit score needed to lease a car, generally, you may find that most dealerships require a greater credit score than 500. At this stage, it would be worthwhile to take some steps towards improving your credit score before leasing a car.

    Can you pay a car lease with a credit card?

    This will depend on your auto dealership. Most dealers will be happy to take payment with a credit card, but keep in mind the risks involved and be sure this is a feasible method of payment for you in the long term.

    Does leasing a car affect your credit score?

    Leasing a car will affect your credit score, depending on how consistent you are in making the monthly payments. If you can pay in full and on time, you will see your credit score increase over the course of the lease agreement. However, missing payments will likely lead to a lower credit score. 

    Do I need to go through a credit check to lease a car?

    Yes, in order to lease a car in Canada, most dealerships will check your credit score. While this isn’t the only factor involved, it helps lenders assess the risk you represent as a borrower.

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    About The Author: Arthur Dubois
    Passionate about personal finance and financial technology, Arthur Dubois is a writer and SEO specialist at Hardbacon. Since arriving in Canada, he has managed to build his credit score, which he monitors for free using Borrowell. Arthur invests in the stock market without paying any fees through the online broker Wealthsimple Trade and earns 2.5% interest on the money he keeps in his EQ Bank's Savings Plus Account. He pays for his online subscriptions using his prepaid KOHO credit card, and uses his BMO CashBack Mastercard for most of his in-store purchases. When he buys bitcoins, it’s with the BitBuy online platform. Of course it goes without saying that he uses the Hardbacon app so that he can manage all of his finances from one convenient place.

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