Will my personal credit be dinged if I lease a car through my corporation?

I want to pull the trigger on a lease, but am fearful it may screw up a mortgage I’m going to try and obtain next month for a property purchase. I have great credit, but my concern is showing another monthly payment I need to make and it creating an issue during underwriting. Thanks mortgage crisis.

Anyways, I do have a C-corporation, and am wondering if I could lease the car through the business and not have the credit inquiry on my personal credit or have the lease obligation tied to me personally. If I do this, does anyone know if the dealer will still run my personal credit or if I’ll be tied to the monthly payment in any way?

Thanks

If you can legitimately afford the car it won’t matter. Lease payment is just one payment of many that gets factored into DTI.

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you will be tied. dealer still need a person responsible for a lease, unless your a real big cooperation and have years of tax returns to prove otherwise.

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I have tried putting a lease under my c-corp and even offered 3 years of tax returns. Dealer still wanted me to personally guarantee the lease. They wouldn’t even pull the corp credit first to check if it was good enough. I would not mess with anything that would affect my credit or debt to income ratio right before applying for a mortgage.

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You will be co-applicant on the lease, your credit report will be run and the total lease cost will be on your credit.

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This would also open up tax implications that can get complicated. I advise against it for people that use cars for personal purposes. Most people do not account for this properly, and you could be on the hook for a ton of interest and penalties.

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Way to be a buzzkill, Deloitte :grin:

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I dumped public accounting 7 years ago, and never worked for Deloitte. :stuck_out_tongue:

I thought one of my main purposes here was to make sure people don’t make stupid tax decisions? Haha.

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there’s two ways to be listed with a business…

a co-applicant is listed on the registration like premier business AND tricia
vs a guarantor is just listed on registration with premier business
– and i sign papers behind the scenes…

for GM, we still do credit inquiry but it’s not placed on their credit if they are just a guarantor and not a co-applicant.

not sure how other banks works, i think Ally is the same.

sorry this thing wont upload straight.

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Thanks for the feedback everyone. I appreciate it!

My current highlander lease is on my 7 month old corporation my personal credit was run but loan doesnt show up on my personal credit i did PG the loan so if i default on it then it will go on my personal credit if my corporation was older and showed a lot more money then i would probably have gotten the line of credit by TFS. But if you’re trying for a mortgage then speak with your mortgage guy if they’ll allow it or if your ratios can afford another loan just in case.

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It seems like it varies by lender. TFS and GMC appear to have the same criteria, but bmw doesn’t. I’m getting a bmw, so my hands are pretty tied for the moment.

I won’t have ratio issues, but will run it by the lender I use.

Yeah it really does, learned the hard way with business credit cards my platinum bus does not show up on personal credit but my capital spark does saw personal credit score dive when a $40k balance showed up lol

Don’t ask a bunch of mooks on a random message board. Ask your mortgage provider.

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Don’t buy furniture? C’mon.

Some like to buy a $6000 sofa that was just discounted from $8000 plus a lot of other similar items of “prime necessity” the moment their offer gets accepted and the closing process starts because they feel owners already. Often it comes to big total amount and lands as a separate 5-7 years long credit that gets approved way quicker than the mortgage closes which may prevent the mortgage from actually closing.

@tsm talk to your loan officer, that kind of questions and insight knowledge are essential part of his work.

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The big “tip” in the infographic was “Don’t buy furniture.”

You do not have to finance furniture in order to buy furniture.

God help people who are making 84 payments on an end table.

Not when it’s free to borrow money, while actively saving your earnings.

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Almost all of these are bogus, either in whole or in part.

1 - You can apply for as many credit cards as you’d like. You will have to provide an explanation for all recent inquiries (last time I was required to do this I just had to check one box on a form and sign the form). The underwriter may want to verify that you haven’t created any new debt with the new cards. This is more work for the processor, but boohoo, you’re paying a fee to have your mortgage processed.

2 - If your new car payment doesn’t blow up your DTI, get the car if you need one. Make your mortgage company aware of the new payment so they calculate DTI correctly. Also, some people pay cash for cars. Yes, really, not everyone strings out payments on everything they possess.

3 - A job change within the same industry is generally construed as continuous employment. New job may require an offer letter/other additional paperwork, but it won’t disqualify you for the mortgage.

4 - As long as the account has no balance (which it shouldn’t) and you aren’t carrying substantial balances on other cards (which you shouldn’t), close credit cards if you want to. Your average age of accounts will not be impacted because AAoA includes closed accounts.

5 - Buy all the furniture you want. If you must finance it, just make sure the new payment doesn’t blow up your DTI. If you are one sofa payment away from blowing up your DTI, you are in too fragile a position to buy a house.

6 - You can spend all the savings you want if you have sufficient reserves. If you don’t have sufficient reserves you are in too fragile a position to buy a house.

7 - You can move money around all you want. You can take a pile of $100 bills and bury them in the yard, or douse them with lighter fluid and drop a match. The only transfers you have to document are for the accounts that hold the required reserves. You don’t have to declare every account or every shoebox full of money on a mortgage application; in fact, over-disclosing just means you have to produce more paperwork.