"My Dog Ate My Credit Score." Sounds like a pretty lame excuse, but thanks to the concept of pet leasing, it actually is possible to ruin your credit rating through the acquisition of a pet. Wait, pet leasing? Like, Rent-a-Rottweiler?
Breeders or pet stores that sell pets may offer financing for more expensive purebred animals. Check the terms of that financing very carefully. Most people assume that they own the animal, but retailers or breeders that offer financing through Wags Lending and similar companies are actually offering a leasing model. Pet suppliers may not even realize the type of financing they are offering and fail to outline the terms to their customers properly. As a result, pet owners have learned the hard way that they are really pet leasers.
In essence, by purchasing a pet through a lease model, you agree to make a series of monthly payments, with potentially very high interest rates that can drive total costs far above your pet's list price. Should you fail to make payments, you are expected to return your pet — and if you fail to make payments or return your pet, you will create the same detrimental effect on your credit score as you would by defaulting on any other lease or loan arrangement.
This style of pet leasing is strongly discouraged by the American Kennel Club (AKC). In a 2015 statement, the AKC called out "predatory pet leasing schemes that victimize potential owners, undermine a lifetime commitment to a pet, and do not confer the rights and responsibilities associated with legal ownership of a pet."
Pet owners are sometimes caught by surprise once they realize how much they are paying for their pet, but at that point, it is often too late. How many people are going to return a cat or dog that has become a beloved part of the family, even if they realize they are paying far more than expected?
What should you do in this case? We suggest doing what you should have done originally and read a copy of the agreement that you signed. If you don't have a copy, call the financing company and ask for one. After reviewing the agreement, you'll need to decide whether to simply make your payments on time as required and chalk it up to lessons learned, or work out how to terminate the lease without harming your credit score — or harming the pet which you are about to return. (Do the right thing and determine what will happen to the returned pet. The answer may alter your decision.)
Leasing companies count on the likelihood of you bonding with a pet regardless of the price, along with your desire to take the pet home right away without reading over financing agreements with boring legal jargon. It's easy to avoid this situation by choosing a more affordable pet, or, if you simply must have a more expensive pet, placing your pet's purchase on a credit card. Credit card interest rates are not usually low, but you are likely to save money over the leasing model and you will not have to worry about any return process (although we would like to see a repo man try to repossess a Great Dane).
There's another excellent reason not to lease a pet. Consider that there are plenty of pets at your local animal shelter waiting for someone to give them a forever home. They may ruin your slippers and even a patch of your carpet, but they won't ruin your credit score — and they will love you just as much as the $2,000 dog that ends up costing you upwards of $5,000.
You can check your credit score and read your credit report for free within minutes using Credit Manager by MoneyTips.