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Many people don’t carry cash these days, preferring to make a purchase by tapping or swiping a debit card or credit card. However, there are times it can actually pay to dip into your wallet and break out the bills. Using cash can be more secure and less costly, among other benefits.

Here, you’ll learn when it can be better to buy with cash and when plastic is preferable.

The Benefits of Cash

Here are some of the pros of using cash:

You May Get a Discount

You may be rewarded for paying cash, like paying a lower price at the gas station or when you get take-out at a restaurant.

Many businesses pay a fee for accepting credit and debit cards, so they may be willing to charge you less if you’ll pay in cash. If you frequently fill up your tank, saving even 10 to 20 cents per gallon can add up to significant savings over time.

It Can Help You Avoid Overspending

When you tap or swipe your credit or debit card, you don’t physically see your money leaving your account. Since there’s no sense of immediacy or consequence, it can be easy to spend more than you originally intended. That can lead to debt and overdraft or NSF charges.

If, on the other hand, you leave home with only the amount of money you need for the day in cash, your spending is likely to be more mindful. That could mean you may have a better chance of sticking to your budget and avoiding overspending.

There Are Fewer Security Risks

Yes, someone could rob you when you are carrying cash. However, there is less risk of identity theft or your information getting stolen when you pay with cash vs. a debit or credit card.

You Can Avoid Fees

Cash is a one-shot deal — the purchase you made won’t end up costing you a penny more. With credit and debit, however, you can end up paying additional charges down the line, from late fees to interest payments on debt.

Recommended: How to Avoid Overdraft Fees

Times When You Should Pay in Cash

Your Tab is $10 or Less

It can be a good idea to carry cash for small purchases. Many retailers have a minimum amount of money you must spend in order to use debit or credit. If your purchase is under, you’ll have to throw in extra things (you probably don’t need) to meet the minimum.

When Shopping at a Small or Local Business

Small businesses often offer discounts for cash payments, since it helps them save on bank fees. This can be an easy way to support your local businesses and save a few dollars at the same time.

You Want to Keep Advertisers at Bay

You may have noticed that after you buy something with a credit or debit card, you often get hit with ads and offers for similar products. That’s because retailers can track their customers’ spending and share their information with a third party, who can then target them with ads.

This can be annoying, and also lead to more spending if you’re enticed by an offer. Using cash makes it much harder for businesses to collect and share your information.

Times When You Shouldn’t Pay With Cash

Next, learn about the times when you should keep your wallet shut and find another, non-cash way to pay.

Buying a House

While not an everyday occurrence, some people may have the option to plunk down cash they’ve stashed in their savings account to buy a property.

While buying a home with cash vs. getting a mortgage may get you the house, it may not be the most prudent move in the long run, especially if it wipes out all of your savings.

A mortgage has tax benefits and timely payments can help you build good credit. Also, there could be better uses for all that cash, like investing in the stock market or elsewhere.

Business Expenses

If you own your own business, have a side gig, or do freelance work, it can be better to use credit (or even a check) to pay for business-related purchases. You’ll likely want a paper trail so you can deduct these expenses on your tax return.

Another potential perk of using credit is that it may offer some purchase protection in event something you buy for your business that breaks or gets stolen soon after you purchase it.

Paying Service Providers

You may think a service provider, whether it’s an electrician or an auto mechanic did a good job, but only time will tell. Using credit can offer you some protection in the event that you experience problems with a service after you’ve already paid for it.

Renting a Car

Often your credit card will provide insurance on car rentals (which can help you save on renting a car), but only if you use that form of payment, as opposed to debit or cash. Using credit for the car rental can help you avoid paying for something you don’t need to purchase.

You’re Looking to Build Credit

If you need to build your credit score, one way to accomplish that is to use your credit card on a regular basis and show that you’re responsible by paying what you owe each month, consistently and on time.

When Buying Electronics

Using your credit card instead of cash for electronics can be a big advantage if your credit card offers extended warranties as a cardmember benefit. This allows you to get peace of mind without having to pony up for the store’s warranty. And, you can simply pay off the balance as soon as the bill comes.

You’re Looking to Track Your Spending

If you’re looking to see where your money is going so you can track your spending and set up a monthly budget, it can be easier if you pay with credit or debit.

Your financial institution may even offer you a pie chart of your spending from your bank account, broken down into categories. Seeing everything in black and white can help you become better at budgeting.

Alternatives to Using Cash

Paying in cash has its pros and cons. If you decide that you want to pay with something other than cash, here are some alternatives.

Cash vs Credit Cards

A credit card can be a good alternative to cash if you are able to pay it off in full every month, and you do. If managed well, credit cards (even secured credit cards) can help you build credit to buy a home or another large purchase in the future.

Cash vs Debit Cards

A debit card can be a good substitute for cash, as long as you know there’s money in the bank. By using a debit card, you’re not incurring any new high-interest debt. As long as you are not incurring any overdraft fees or withdrawing money from ATMs that charge high fees, debit cards can be a simple way to make purchases.

Cash vs Financing or Loans

It can sometimes be better to pay for a major purchase, like a car or a home, with a loan rather than cash if the interest rate is lower than what you could likely earn by investing that money.

However, you’ll also want to keep in mind that there is risk involved in investing in the stock market, so there is always a chance that you could lose money.

Recommended: Leasing vs. Buying a Car: What’s Right for You?

The Takeaway

While there’s a movement toward a cashless society, paying in cash can help you garner discounts at local businesses, stick to your budget, avoid paying overdraft and interest fees, protect against identity theft, and keep advertisers from targeting you.

If you’re looking for a safe place to keep your cash when not spending it, where it can earn some interest and grow, take a closer look at your banking partner.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

When should you pay with cash?

Cash can be a good option when paying for a small purchase (say, under $10 or $20) or when paying at a small retailer who may add a fee for credit card purchases. Cash can also help you be more mindful about spending and can be good when trying to rein in discretionary expenses.

Is it better to pay in cash?

It can be better to pay in cash if it can help you avoid high interest (which can accrue if you carry a credit card balance) or get a discount on a purchase (say, at a small retailer that offers a discount for cash). However, a person could earn rewards when using a credit card or could enjoy cash advantages when getting a mortgage vs. paying for a property with cash.

Is it smart to keep money in cash?

It can be smart to keep a small sum of money in cash for unexpected and/or pressing expenses, such as tipping a service person for a repair. But cash is usually safest in a financial institution, where it can’t get lost or stolen and in most cases is insured up to the limits of the Federal Deposit Insurance Corporation or National Credit Union Administration.

Photo credit: iStock/towfiqu ahamed

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 11/12/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOBNK-Q325-075

Finding an unfamiliar purchase or withdrawal on your checking account statement or online activity can be alarming. While it could be a legitimate transaction you simply forgot about, it could also be a sign that your account has been compromised.

Either way, there’s no reason to panic: Banks typically reimburse customers for unauthorized transactions. That means if someone steals money from your bank account, you can generally get it back.

The hitch is that you need to act fairly quickly. The window for resolving disputes for debit cards and bank accounts is generally shorter than it is than resolving disputes for credit cards.
Here’s a closer look at what counts as an unauthorized banking transaction, what to do if someone steals money from your bank account, and how to protect yourself in the future

What Constitutes an Unauthorized Transaction

An unauthorized transaction occurs when someone makes a payment or transfers money from your bank account without your permission.^[1] This could happen to your account for various reasons, including someone stealing your debit card, a hacker or fraudster using your stolen account information, or even a simple error or mistake.

However, it’s important to distinguish between unauthorized transactions and transactions you may simply disagree with. Some examples of charges you may find questionable or irksome but that don’t qualify as unauthorized transactions include:

These cases, while potentially frustrating, are generally not considered unauthorized by banks. Instead, they may fall under billing disputes or customer service issues.

Steps to Take If You Suspect an Unauthorized Transaction

If you believe a transaction in your banking history truly is unauthorized, you’ll want to act quickly. Federal law provides strong consumer protections, but they often come with strict timelines. Waiting too long can limit your options and your potential for a full refund.^[2]

Here are the steps that can help you make a complete recovery:

1. Contact Your Bank or Credit Union Immediately

It’s wise to notify your bank or credit union as soon as you notice a potentially fraudulent transaction. You can do this by calling the customer service number found on the back of your debit card, listed on your statement, or published on the bank’s website or in its app. You’ll likely need to provide your account information, the date and amount of the transaction^[3], and why you believe it was unauthorized.

Many financial institutions also allow you to report fraud through their online banking or mobile app platforms. To start your dispute, you typically need to select the transaction from your recent transaction list, then select “Report an issue,” and answer questions about the charge.

2. File a Formal Dispute/Follow-Up in Writing

Once you’ve contacted your bank, you may be asked to submit a written statement to back up your claim and include any supporting documents (such as screenshots or receipts).

Even if your bank doesn’t request you to file a formal dispute, it can be a good idea to follow up your phone call with a written or emailed letter.^[4] You’ll want to be sure to include:

Once you’ve notified your institution about an unauthorized transaction, it generally has 10 business days to investigate the issue. The countdown begins from the time you give verbal notice of the issue, even if you were required to follow-up with written confirmation.

If the transaction involved a merchant, you may also want to contact the merchant and dispute the purchase. The merchant could potentially refund your money more quickly than the bank can.

Recommended: How to Cancel a Pending Transaction

3. Change Your Account Passwords and PINs

If someone has gained unauthorized access to your bank account, there’s a good chance they may have your login credentials or debit card information. To protect yourself from further bank account fraud:

4. Review Recent Transactions Carefully

After identifying one suspicious charge, it’s crucial to scan through recent transactions for other red flags. Be on the lookout for charges from unfamiliar locations and businesses, duplicate transactions, and small transactions you didn’t authorize (fraudsters often start with small “test” charges, or micro-payments, before moving on to larger amounts^[6]).

You’ll want to report any additional suspicious activity you find during this review.

5. Consider Placing a Freeze or Lock on Your Account/Card

To prevent further unauthorized use, you may want to place a temporary lock or freeze on your debit card or account.

Many banks offer:

Will Your Bank Refund Unauthorized Transactions?

Yes — in most cases, your bank is required by law to reimburse you for unauthorized electronic transactions, provided you report them within a specific time frame. In the case of debit card loss or theft, however, you may have some liability.

Timeline for Reporting Suspicious Activity

Under federal law, you have protections that help limit what you have to pay if your ATM or debit card is lost or stolen, or you notice any unauthorized charges on your bank statement. Here’s how it breaks down:

Credit vs Debit Unauthorized Transaction Liability

Credit cards generally offer broader liability protections than debit cards.

Under the Fair Credit Billing Act, your liability for unauthorized credit card transactions is limited to $50 if you report the suspicious charge within 60 days.^[7] However, the major credit card issuers generally offer zero liability for unauthorized purchases if you report them within 30 days, and some issuers offer zero liability with no time limit.

Debit cards work differently, since the money you spend is immediately debited from your checking account. As mentioned above, your liability depends on how quickly you report the lost or stolen card. If you report it within two business days, your maximum loss will be $50. If you wait more than two business days but less than 60 days, your max loss will be $500. After 60 days, your liability is unlimited.

Recommended: Debit Card Fraud: How It Works and How To Prevent It

While no one is immune to fraud, you can significantly reduce your risk by following some smart financial habits:

Recommended: Passive Income Ideas

The Takeaway

Unauthorized transactions can be unsettling, but you’re not powerless. You can typically recoup your losses if you act quickly.
If you notice something suspicious, immediately contact your bank, file a dispute, and take steps to secure your information. There are also things you can do to prevent future incidents, like avoiding ATMs that could be tampered with, monitoring your accounts, and using a digital wallet.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

Can I get my money back if someone used my debit card?

Yes, you can usually get your money back if someone used your debit card without permission, especially if you report it quickly, though you may have some liability. Typically, if you report the unauthorized debit card use within two business days, your liability is limited to $50. If you wait more than two business days but less than 60 days, your max loss will be $500. After 60 days, you could be on the hook for the full amount.

Can banks reverse unauthorized transactions?

Yes, banks are generally required to refund unauthorized transactions if you report them in a timely manner. However, it’s important to act quickly. If you report an unauthorized electronic fund transfer (EFT) later than 60 days after receiving the statement that lists the charge, you may be liable for the full amount.

Can my bank find out who used my card?

Yes, banks can sometimes identify who used a card, especially in cases of fraud. Banks often work with law enforcement to gather data, including transaction details, location data (if available), IP addresses (for online transactions), and surveillance footage, when investigating unauthorized transactions. However, it’s not always possible to pinpoint the exact identity of the card user.

How do I get a refund for an unauthorized payment?

To get a refund for an unauthorized payment, you’ll want to contact your bank immediately through their fraud or customer service line. Banks typically require you to report the issue within 60 days of the statement date showing the transaction. They may ask you to fill out a dispute form or provide written confirmation. The bank will then investigate and determine whether to refund the payment based on the findings.

Is there a time limit on when I can report unauthorized transactions?

Yes. Under federal law, you must report any unauthorized bank account transactions within 60 days of the statement date that includes the unauthorized charge to avoid any liability. Delays in reporting could increase your financial responsibility, potentially up to the full amount. So it’s crucial to monitor your account regularly and report any suspicious activity as soon as possible.

About the author

Julia Califano

Julia Califano is an award-winning journalist who covers banking, small business, personal loans, student loans, and other money issues for SoFi. She has over 20 years of experience writing about personal finance and lifestyle topics. Read full bio.

photo credit: iStock/Yurii Karvatskyi
SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 11/12/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOBNK-Q225-040

While it may not be as much fun as scrolling through social media posts, there’s definitely a payoff for reviewing your monthly bank statements. Consistently reviewing these documents is one of the most effective ways to stay on top of your financial health. From catching errors (or even fraud) to aligning your spending with your money goals, taking a few minutes each month to drill down your bank account statements can help you avoid costly mistakes and make smarter decisions.

Here’s your guide to reviewing bank statements as quickly and efficiently as possible.

What Is a Bank Account Statement?

A bank account statement is a summary of all transactions made through your bank account during a specific time period, usually a month. You’ll likely see your paycheck being deposited and your rent/mortgage, utilities, credit card, and subscription payments going out.

Your bank statement is provided to by your bank either through online access, in its app, or via a mailed paper copy.

What Information Does It Contain?

A typical bank statement includes:

This document serves as both a financial report and a tool for accountability.

Recommended: Understanding Bank Statement Abbreviations

Why Review Your Bank Statement Each Month?

Even if you use banking alerts or budgeting apps to track spending, looking over your bank statements can offer crucial insights. Here’s a look at four reasons why it’s important to review your bank statement each month.

Catch Errors and Unauthorized Transactions

Banks process millions of transactions daily, and while errors are extremely rare, they do happen. You might notice a double charge, an incorrect amount, or a transaction you didn’t authorize.

Checking your bank statement also allows you to catch any fraudulent charges. While it’s hard to determine the exact number of bank fraud instances in a year, the Federal Trade Commission (FTC) does receive more than 100,000 reports of bank fraud per year, and millions of cases of identity theft.^[1] Banks work hard to protect accounts from such issues, but it can be worthwhile to be vigilant.

Regular reviews help you identify and report unauthorized transactions quickly, often within the window required to dispute them and recover funds, which is typically 60 days.^[2]

Monitor Your Spending Habits

Even quickly scanning your balance summary can be revealing, since it shows you exactly how much came in that month (total deposits) and how much went out that month (total deductions).

If you consistently see that your monthly spending is around the same as your monthly earning (meaning you aren’t saving money) or, worse, that your spending tends to exceed your earning (meaning you’re going backwards), you’ll want to drill down and look at where your money is going each month in more detail.

Identify Potential Savings Opportunities

Reviewing your bank statements regularly can help you identify patterns in your spending and opportunities to save. Are you tapping your debit card daily to pay for a fancy coffee? Has your home insurance, which you have on autopay, gone up significantly without your realizing it? Are you getting hit with monthly bank fees?

Maybe that cold foam coffee becomes a TGIF treat rather than an everyday expense. Or it’s time to shop for a new, more affordable insurance policy — or a bank with lower (or no) fees. Statements can give you the reality check you need to adjust your habits and make conscious choices with your cash.

Stay on Track With Your Budget

How can monitoring your bank account transactions help you stick to your budget? For one reason, your bank statement is a snapshot of your financial behavior, which makes it a powerful tool for comparing your actual spending with your budget. Say your monthly budget earmarks $400 for groceries, but you see $600 worth of supermarket transactions. That could tell you it’s time to reassess either your budget, your buying behavior, or both.

Reviewing your statement helps you stay informed and can motivate you to ramp up your financial discipline. If after several cycles you find your earnings, spending, and savings are not well-balanced, that might be a signal that it’s time to investigate some different types of budgets, such as the envelope system of the 50/30/20 budget rule.

Tips for Reviewing Your Account Statements

While it may feel like drudgery, monthly statement reviews don’t take much time and can deliver big payoffs. Here are a few tips to make the process easier and more effective.

Set Aside Dedicated Time Each Month

Schedule a 15- to 30-minute time slot for the same day each month, ideally on or near the day your statement is issued. Consistency makes it a habit and helps you stay on top of changes in your financial behavior. For some added motivation, you might put on your favorite playlist, make yourself some matcha, or somehow link the review with something you really enjoy.

Compare Transactions to Your Records

Whether you track monthly expenses using an app, spreadsheet, or checkbook register (or simply collect receipts), it’s a good idea to cross-check your statement against your records. This little bit of bookkeeping effort can help ensure there are no discrepancies or missed entries in your records. It could ward off, say, a bounced check and the bank fees that come with that.

Look for Recurring Payments and Subscriptions

Scan for automatic charges such as gym memberships, cloud storage fees, or subscriptions. If you’re no longer using a streaming service or anything else you are being charged for on a monthly basis, it’s time to cancel.

Investigate Any Unfamiliar Transactions

If something doesn’t look familiar, don’t automatically assume it’s a mistake on your part. It could be fraud or an error. Check with your partner or family members if it’s a joint account, and then contact your bank if you can’t verify it.

How to Report Unexpected Fees and Charges

If you notice a suspicious fee or incorrect transaction, here’s how to take action:

Most banks have specific dispute resolution procedures and will refund the amount if an error or incidence of fraud is confirmed. If the charge is due to a lost or stolen debit card or PIN, you may be liable for a portion of the transaction, depending on how quickly you report the loss.^[2]

Align Spending With Your Financial Goals

Whether you’re saving for the down payment on a house, working to eliminate credit card debt, or building an emergency fund, reviewing your statement can show you places where you may be overspending and allow you to quickly correct course. This can help you save more each month and get closer to your financial goals.

Recommended: How Long Should You Keep Bank Statements?

How Often Do Most People Check Their Bank Statements?

While habits vary, many financial experts recommend reviewing your statement at least once a month. Some people check their account activity more frequently, however, via online banking and mobile banking apps.

A January 2025 MarketWatch Guides survey found that most people check their accounts either daily (36%) or a few times a week (33%).^[3] But that’s often just to eyeball the bank account balance. Fewer people take the time to carefully review their monthly statements.

Even if you frequently check your balance or transaction activity through your banking app or online account, it’s still a useful exercise to look at your monthly online or paper statement to get an overview of your monthly cash flow.

The Takeaway

Your bank statement is more than just a record of financial transactions. Reviewed carefully, it’s a monthly money check-in that can protect you from fraud, reinforce the power of your budget, and help you spend smarter. Taking time each month to review it helps you stay informed, avoid fees, and make intentional money moves.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What should I do if I see a transaction on my statement that I don’t recognize?

If you notice an unauthorized transaction on your bank statement, you’ll want to immediately contact your bank and report it. The bank will investigate the transaction and if they find it to be fraudulent or due to an error, they will typically refund any lost funds. If the charge is due to a lost or stolen debit card or PIN, however, you may be liable for a portion of the transaction, depending on how quickly you report the loss.

Can reviewing my account statement help me avoid fees?

Yes. Reviewing your account statements allows you to see when and why your bank may be charging fees, such as monthly account fees, overdraft charges, and out-of-network ATM fees. This can prompt you to take action to avoid fees in the future. Or you might move your accounts to a bank that charges fewer (or no) fees.

What is the purpose of a bank account review?

A bank account review helps you understand your financial habits, track spending, and spot any unusual or unauthorized transactions. By reviewing your bank account regularly, you can ensure all transactions are accurate, avoid overdraft fees, and identify areas where you might cut costs or save more. It also helps you stay on top of recurring charges or subscriptions you may have forgotten about. Overall, it’s a key step in maintaining financial health and making informed budgeting decisions.

Should I let my partner review my bank statements?

It depends on the nature of your relationship and level or shared financial responsibility. If you’re in a committed relationship where finances are shared, transparency can build trust and help both parties stay aligned on spending and saving goals. However, if you maintain separate finances and value financial privacy, it’s okay to set boundaries. Either way, open communication is key — discuss expectations around money management and decide together what level of access feels comfortable and fair.

How often should I review my bank statements?

It’s a good idea to review your bank statements at least once a month, ideally as soon as your statement becomes available. This can help you detect errors, fraudulent charges, or unexpected fees early. Some people like to monitor their bank accounts more frequently using mobile apps and online banking. The frequency depends on your spending habits and financial goals.

photo credit: iStock/damircudic

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 11/12/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOBNK-Q225-039

That ginormous bill from the vet, the cost of a new water heater, or a plane ticket to visit your grandma who’s not doing too well: These are examples of unexpected expenses that can crop up out of nowhere and wreak havoc on your monthly budget.

It’s important to recognize that these surprise expenses can (and indeed do) pop up for many people. By preparing for these major outflows of cash, you can be financially ready and feel more secure. Here’s a look at common unexpected expenses and how to pay for them.

What Are Unexpected Expenses and Why Do They Matter?

Unexpected expenses are costs that occur without warning. Unlike your monthly rent, student loan payment, or groceries, these aren’t part of your regular budget — but they still demand attention and cash. If not managed well, they can lead to debt and stress, and they can keep you from reaching your financial goals.

Whether it’s a flooded basement or an unplanned trip across the country, unexpected expenses can put your financial resilience to the test. Many people know they should have an emergency fund parked in a traditional savings account or online bank account, but how many really have one?

According to a January 2025 survey by U.S. News, 42% of Americans have no emergency savings at all.^[1] That means almost half of all Americans are vulnerable to having their budget derailed by a surprise expense. Knowing what to look out for — and how to prep — can help you avoid being among those ranks so you can bounce back with relative ease.

Recommended: Savings Goal Calculator

Common Examples of Unexpected Expenses

While you can’t predict everything (after all, no one sees a fender bender coming), there are some unexpected expenses that occur more commonly than others. It can be wise to have them, and the funds needed to cover them, on your radar.

1. Medical Bills

Even with health insurance, a sudden illness, injury, or emergency room visit can lead to out-of-pocket expenses. From copays to surprise bills, medical costs can quickly add up. And dental expenses can be notoriously pricey.

According to a 2024 analysis by the health policy group KFF, Americans owe an eye-watering $220 billion in medical debt. Around 14 million people (6% of adults) owe over $1,000 in medical debt, and roughly three million people (1% of adults) have more than $10,000 in medical debt hanging over them.^[2]

2. Car Repairs

Your car never seems to break down at a convenient time. Then again, when would a convenient time be? Whether it’s a dead battery, flat tire, or transmission issue, car repair bills can be costly and urgent — especially if you rely on your vehicle for work, daily life, or a long-planned road trip with the family.

3. Home Repairs

If you own your own home, plumbing leaks, non-functional air conditioning, and roof damage are just a few examples of surprise home repairs that can come along and drain your savings.

In fact, so-called unexpected home expenses are so common, financial experts generally recommend setting aside 1% to 4% of home’s purchase price each year to cover them. So if you paid $400,000 for your home, you should have $4,000 to $1,600 saved per year for repairs and maintenance. If your home is fairly new, 1% is likely to be enough. If your home is more than 30 years old, on the other hand, you’ll want to aim for a 4% savings goal.^[3]

4. Job Loss or Reduced Income

A full 1.5 million Americans are laid off each month, according to February 2025 data from the U.S. Bureau of Labor Statistics.^[4] Losing a job or having your hours cut can be financially devastating. This can be especially true for recent hires and gig workers, who are unlikely to receive any severance.

Without a steady income, affording everyday living expenses (and avoiding credit card debt) can become a challenge. Considering that it may take time to get back to full-time employment, it’s wise to have three to six months’ worth of living expenses (rent, utilities, other bills, and groceries) set aside in the event of income loss.

5. Emergency Travel

A last-minute trip due to a family emergency, funeral, or urgent situation can be emotionally and financially stressful. Flights, hotels, and meals add up fast when you’re traveling on short notice. But whether it’s an ailing relative or a kid who’s miserable at summer camp, sometimes you need to jump and go where you’re needed. Having a solid cash cushion in the bank can help minimize some of the stress involved in emergency travel.

6. Pet Emergencies

Your furry friends are part of the family, but vet bills for sudden illnesses, injuries, or surgeries can be concerningly high — especially without pet insurance. Currently, an emergency vet visit can ring in at $100 to $150 on average, imaging can cost $150 to $600, and emergency surgery can run from $2,000 to $6,000.^[5]

7. Legal Fees

Whether it’s dealing with a traffic violation, custody issue, or unexpected legal dispute, attorney fees and court costs can be significant and throw a wrench into your monthly budget. As of late 2024, the median hourly fee for a lawyer was approximately $350 at a small firm.^[6] That can add up quickly.

Financial Planning for Unexpected Expenses

While you can’t prevent unpleasant surprises, you can prepare for them. A little financial planning goes a long way toward reducing the impact of unexpected expenses.

How to Reduce Financial Stress

To lower your financial anxiety, both day-to-day and when you’re confronted by an unexpected expense, it’s a good idea to take stock of your financial health. Knowing your income, expenses, debt, and savings gives you a clear picture of where you stand — and where you can improve.

It’s also a good idea to assess how much money you have that is liquid or, in other words, can be easily accessed in an emergency. That would mean funds in checking or savings accounts that you could dip into with minimal notice.

How to Handle Unexpected Expenses Without Breaking the Bank

Here’s a look at how to prepare for unexpected expenses, plus tips on what to do if you get hit with an emergency expense you don’t have enough cash to cover.

Build an Emergency Fund

As mentioned above, a common rule of thumb is to have at least three to six months’ worth of basic living expenses set aside in a dedicated high-yield savings account. However, you may want to aim higher — say six to 12 months’ of expenses if you’re the sole financial provider in your family, you’re self-employed, or you work seasonally.

You can use an online emergency fund calculator to help you do the math. Once you have a target savings goal, you might automate transfers from checking to savings to make the process seamless. Even stashing $25 per paycheck can be a solid start.

Also, think about putting any financial windfalls (an inheritance, a bonus at work, a tax refund) into your emergency fund to pump it up that much faster.

Create a Realistic Budget

To make sure you can cover an unexpected expense — and recover from one after it’s paid — it’s a good idea to set up a basic monthly spending budget. This entails making a list of your essential and nonessential expenses and looking for places where you may be able to cut back. Any cash you free up can then be siphoned into savings.

There are many different types of budgets but one popular approach is the 50/30/20 rule. This method divides your after-tax income into three categories: 50% for needs, 30% for wants, and 20% for savings and debt repayment beyond the minimum. However, you may need to adjust the percentages based on your needs and expenses.

Recommended: 20 Commonly Forgotten Monthly Expenses

Consider Insurance Coverage

Financial planning for unexpected expenses also includes evaluating your insurance coverage. Health, home, disability, auto, and pet insurance can offer peace of mind and help offset major costs. It’s a good idea to periodically review your policies to make sure you have adequate coverage for your needs. Some people may want to look into umbrella insurance, which is extra insurance that provides protection beyond existing limits and coverages of other policies.

Explore Different Payment Options

If you get hit with an unplanned expense and don’t have enough cash to cover it, you still have options. One is to ask the provider if they offer a payment plan or zero-interest financing. If that doesn’t help, you might use a credit card with a low or 0% introductory rate to cover the, and plan to pay off your balance before the rate goes up.

Other ways to pay for unexpected expenses include getting a personal loan (these loans that can be used for virtually any purpose and generally have lower rates than credit cards) or, if you own your home, you might tap your home equity via a home equity loan or home equity line of credit (HELOC).

For a lucky few, a family member or trusted friend might offer a loan.

Negotiate Bills When Possible

If you’re facing a bill you cannot pay, it doesn’t hurt to ask the provider if they can lower the charges. For best results, you’ll want to contact their billing department, let them know your position (particularly if you’re facing financial hardship), and politely ask if they would be willing to offer a discount if you make a payment that day. Many medical providers, repair services, and even legal firms are open to negotiation if you’re upfront about your situation.

The Takeaway

Unexpected expenses are a part of life — but they don’t have to derail your financial security nor your long-term goals. By understanding what might come up and planning ahead, you can face financial surprises with more confidence and less stress. Establishing a solid budget, knowing when and how to negotiate bills, and building an emergency fund in a high-yield savings account can all be steps in the right direction.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What are some examples of unexpected expenses I should be prepared for?

Some examples of unexpected expenses to be prepared for are medical expenses (for you, your family members, and any pets); home repairs; car repairs; legal fees; and daily living expenses if you experience job loss.

How much money should I have in my emergency fund?

Financial experts recommend that people have three to six months’ worth of basic living expenses in an emergency fund. However, some note that this should be the starting point and more may be needed. It can be wise to have a larger goal for your emergency fund if, say, you are the sole breadwinner in your family, you’re self-employed, or you work seasonally.

What should I do if I face an unexpected expense and don’t have enough savings?

If you face an unexpected expense and don’t have enough to pay for it, you have options. You could negotiate with the provider (you might get the amount lowered or a zero-interest payment plan), tap into some home equity via a home equity loan or line of credit, take out a personal loan, or possibly borrow from a friend or family member.

How can I start building an emergency fund?

A good way to start building an emergency fund is to automate recurring transfers from your checking account, where your paycheck is likely deposited, into a dedicated savings account. You can start small with, say, $25 per paycheck and build your savings over time. You might also deposit a financial windfall (such as a bonus or tax refund) into the account.

Should I invest my emergency fund so that it can grow?

Since you never know when you might need to tap your emergency fund, it’s smart to keep it in a low-risk, accessible account where it can earn interest. One good option is a high-yield savings account, often offered at online banks.

If you invest the money, you take on risk, and should you need the money and your account value has dropped, it could be problematic. Withdrawing invested funds can also have tax implications, depending on the type of account, the nature of the investments, and how long you’ve held them.

photo credit: iStock/Sergei Chuyko
SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 11/12/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOBNK-Q225-038

If you are thinking about getting a car, you may be deciding between buying or leasing. And if leasing seems like the right option for your finances and lifestyle, then you probably want to know what is needed to seal that deal.

Leasing a car typically requires both some cash and a solid credit score. If you have a high credit score, you may snag the best possible (meaning lowest) interest rate. If your credit history is not solid, then you may face higher rates or have difficulty getting approved.

Here, we take a closer look at car lease requirements, including the minimum credit score you’ll need, plus whether leasing a car can hurt or help your credit moving forward.

What Are Car Lease Requirements?

A car lease is essentially a long-term rental agreement where you pay to use a vehicle for a specific period, rather than buying it outright. When you apply for the lease, the financing company will want to make sure that you are a responsible borrower. One way they can assess that is by looking at your credit score.

So do you need good credit to lease a car? The answer is, typically yes. Having good credit may make it easier to lease a car because a leasing company may not see you as financially risky as someone who has poor credit. Not all leasing companies will necessarily approve a car lease for someone who has a low credit score.

You might also need to prove that you have a job with a certain income when you’re leasing a car. Minimum income requirements vary by lender, but you typically need to provide pay stubs or tax returns to prove your employment and salary.

💡 Quick Tip: Make money easy. Enjoy the convenience of managing bills, deposits, and transfers from one online bank account with SoFi.

What Credit Score Do You Need to Lease a Car?

Credit scores typically go from 300 to 850, with five credit score ranges:

•  Poor credit score: 300-579

•  Fair credit score: 580-669

•  Good credit score: 670-739

•  Very good credit score: 740-799

•  Exceptional credit score: 800-850.

There is no one specific credit score you need to lease a car, since the minimum credit score requirement varies by dealership. According to Experian® data, however, customers leasing new vehicles in 2024 had an average credit score of 755, which is just above “good” credit, edging into “very good” credit.

While it’s possible to lease a car with a lower credit score, you might end up having to pay a higher-than-average interest rate or put down a big down payment to get approved.

Recommended: How to Manage Your Money Better

Leasing With a Credit Score Above 680

The credit score to lease a car and get favorable rates is one that’s considered at least “good,” meaning between 670 and 739, or higher. Having good credit typically makes it more justifiable for lenders to approve you for the lease because it’s less of a risk to them.

Just as with any type of financing, applicants who have good or better credit may be offered lower interest rates on auto leases. Having an above-average credit score could give you more negotiating power over the rates and terms of the car lease.

💡 Quick Tip: Want a simple way to save more everyday? When you turn on Roundups, all of your debit card purchases are automatically rounded up to the next dollar and deposited into your online savings account.

Leasing With a Credit Score Lower Than 680

Having a lower credit score means you’ll likely have difficulty finding a company willing to lease to you or you’ll pay more to lease a car. Leasing companies may see you as a risk, based on your credit history. You might find that having a trustworthy cosigner on the lease could help you get a lower interest rate or better terms than if you’re applying on your own.

If your credit score is lower than 680, you might want to work on building your credit profile before leasing a car so you can get a better deal. A good place to start is by checking your credit reports from the three major credit bureaus, which you can do for free at AnnualCreditReport.com.

It’s important to check your reports for accuracy — if there are any errors, contact the credit bureau that issued the report.

Recommended: How to Save Up for a Car

Building Your Credit Before Leasing

There are several ways to build your credit profile before leasing a car. Two of the most important to consider:

•  Pay down debt. This will lower your credit utilization ratio or rate, meaning the percentage of your credit limit you are using. “One way to positively impact or maintain your credit score is keeping your credit utilization low,” says Brian Walsh, CFP® and Head of Advice & Planning at SoFi. “Keeping it below 30% is a good starting point, but the lower the better.”

•  Pay on time. Be meticulous about paying your bills on time or even early. Just one or two late payments can have a negative impact on your credit profile.

•  Limit new credit applications. Each application for new credit results in a hard inquiry on your credit report, which can slightly lower your score.

Can Leasing a Car Build Credit?

Any time you apply for credit, you have the opportunity to build your credit. A car lease is credit, just as a car loan would be credit.

How you manage your lease payments affects your credit reports just as a loan would. Making regular, on-time monthly payments can impact your credit in a positive way. Late or missing payments, on the other hand, can have a negative influence on your credit.

In addition, a diverse credit mix, which can include a car lease, may have a positive impact on your credit profile, especially if you have limited credit history.

Can Leasing a Car Affect Your Credit Score?

As mentioned, paying a car lease on time can be a positive thing. However, missing payments or being late with payments could negatively impact your credit, making it harder to secure loans and leases with good terms in the future.

You may also see a small drop in your credit score when the lease begins because your credit report will show a new account is open. You may see a similar small drop when the lease is terminated because the account is closed. Both of these credit events — opening and closing a credit account — can have a temporary negative effect on your credit.

If you’re shopping around at different leasing companies over the course of a few weeks and apply for leases at those places, there will be inquiries into your credit history by the leasing companies. However, those multiple inquiries may show up as just one query on your credit report and minimally impact your credit.

5 Things That Impact Your Credit

Here are factors that can influence your credit profile:

1. Your Payment History

The single biggest factor in your credit score is your payment history, which can boil down to making payments on time, month after month. That can help build your credit. Paying late or not at all can negatively impact your credit.

2. The Amount Owed

This factor looks at the amount of debt you’re carrying relative to your available credit (credit utilization). High credit utilization (using a large portion of your available credit) can negatively affect your credit.

3. The Length of Your Credit History

Having a longer credit history and having managed lines of credit well for years can benefit your credit. It shows that you can successfully borrow and pay back money.

4. Your Credit Mix

Having more than one kind of credit account can show that you manage borrowed funds well. For instance, it could be helpful if you have handled both installment debt (student loans and car loans are examples of this) and revolving accounts (such as credit cards) well.

5. New Credit

If you apply for a number of new lines of credit and have what are known as hard credit pulls done as part of this, your credit could suffer. It can look as if you are applying for a lot of new debt and may soon be overextended rather than financially stable.

The Takeaway

It’s important you consider what credit score is needed to lease a car before you go car shopping. Checking your credit reports in advance will uncover any surprises in your credit history before you’re at the dealership.

If you notice any blemishes in your past, you may want to take steps to positively impact your credit profile, such as making on-time payments and paying down debt, before you lease a car. This may help you save money on your car lease and give you more negotiating power.

The less you have to spend on interest and fees, the farther your money can go while leasing. Successfully managing leases, loans, and credit in general is part of good financial habits. Having the right banking partner can also enhance how well you handle your cash.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

Can you lease a car with a 600 credit score?

While it’s not impossible to lease a car with a 600 credit score, it will likely take more time and energy to find an offer. You will also probably pay a higher interest rate than someone with good or better credit, meaning you will pay more over the long term.

Does leasing a car hurt your credit?

When you apply for a car lease and the leasing company pulls your credit file, you may see a small dip in your credit score in the short term. After that, whether the lease hurts your credit depends on how well you manage the account. If you make on-time payments, it could positively impact your credit profile, but if you pay late or miss payments, your credit could suffer.

Is it better to lease or finance a car?

Whether it’s better to lease or finance a car will depend on your particular financial situation and goals. When you finance a car, you can eventually own it outright. It’s similar to buying a home with a mortgage. Leasing, on the other hand, is similar to renting. You never own the car or have it as an asset, but then again, you might like “trading up” every few years.

Photo credit: iStock/dusanpetkovic

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 11/12/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

SOBNK-Q325-067