*Feature Image: Novated leases and credit scores*

A novated lease can be a smart and tax-effective way to drive a new car without taking on a traditional loan. For many Australians it’s an attractive option because repayments come from your pre-tax income and the process is usually managed through your employer.

If you have concerns about your credit score or you’re worried that past financial issues might hold you back, you’re not alone. Many people wonder whether a credit check is required for a novated lease, if a novated lease is possible with bad credit or whether the lease itself affects your score.

Learn how novated leases work, how lenders assess applications and what you can do if you’re exploring a novated lease with bad credit.

What Is A Novated Lease?

A novated lease is a three-way agreement between you, your employer and a finance provider. The lender purchases the car and your employer makes the repayments using a combination of your pre-tax and post-tax salary.

This setup is known as salary packaging and it can offer tax benefits depending on your personal circumstances. You get full use of the car and at the end of the term you can choose to refinance the residual, upgrade or return the vehicle.

Although your employer is the one sending payments to the lender, the lease is still considered your financial responsibility. That’s why many people wonder about the credit checks for novated leases and how these checks influence approval.

Do Novated Leases Do Credit Checks?

In most cases yes. A finance provider will generally carry out a credit assessment to make sure you can meet the repayments. Even though the deductions come from your salary, the lender still sees this as a form of credit which means they need to confirm your financial reliability and stability. This assessment can include a review of your credit report, your employment history and your income.

Where this often causes confusion is the belief that employer involvement removes the need for individual checks. It doesn’t. The lease is tied to you as the driver, not your employer, so a novated lease credit check is standard.

Can You Get A Novated Lease With Bad Credit?

The short answer is yes it’s possible but it may come with extra conditions. Every lender has its own requirements and risk appetite. Some are open to applicants with a low score while others are more conservative. Your income level, employment status and overall financial position all influence the outcome.

If you’re exploring a novated lease with bad credit, lenders will usually consider:

Whether you have stable ongoing employment
Whether your income comfortably covers the lease repayments
Whether past defaults or issues have been resolved
Whether additional documentation is needed
Whether a higher residual is required to reduce their risk

If you’ve been declined before it doesn’t mean you won’t be approved in future. Your credit profile can improve and a clear plan can help you present stronger to lenders.

Does A Novated Lease Affect Your Credit Score?

Yes, a novated lease can appear on your credit report because it’s a form of finance. Like any credit product your repayment history influences your score. The good news is that consistent on time payments can support your credit profile since repayment history is a key indicator of reliability.

As long as deductions are made on schedule the lease shouldn’t harm your score. Issues only arise if repayments are missed. For many people with strong income but a lower score this steady repayment record can help rebuild their profile and show that past setbacks don’t reflect their current behaviour.

Worried About a Novated Lease Bad Credit Outcome?

It’s normal to feel anxious about your credit score when applying for a novated lease. You might worry that past issues will hold you back but lenders look at more than a single number. Many people with previous defaults still secure approval once their credit file is accurate and up to date.

Start by getting a free copy of your report and checking for any errors or outdated listings. Correcting these can strengthen your position and improve your confidence when approaching a lender.

How To Strengthen Your Application If You Have Bad Credit

If a bad credit novated lease is on your radar there are practical steps you can take to support a better outcome.

Review your credit report carefully: Make sure all information is accurate and up to date. If something doesn’t look right, dispute it or get support from a trusted credit repair professional to handle the process for you.
Make sure past debts are settled where possible: Lenders respond more favourably when outstanding issues have been finalised.
Show consistent employment and income stability: A steady job can balance out concerns about past repayment behaviour.
Avoid multiple credit applications: Too many enquiries within a short timeframe, can temporarily lower your score.

These steps won’t change your credit history overnight but they help you demonstrate that you’re financially stable and ready to manage a lease responsibly.

Rebuilding Your Credit And Moving Forward

If you’re unsure why your score is low or you’ve found errors on your report, getting the right support can make the process clearer and far less stressful. At Real Credit Repairers we help clients correct inaccurate listings, understand what’s affecting their score and present stronger to lenders when exploring finance such as a novated lease.

A novated lease can still be possible with a low score. Lenders consider your broader financial position and income stability, not just a number. With accurate credit information and the right preparation you can improve your options and move forward with confidence.

If you’d like help strengthening your credit, reach out to Real Credit Repairers today and take the first step toward a clearer financial future.

Novated Leases & Credit Scores: Everything You Need To Know