Will My Credit Score Be Used In An Auto Or Car Insurance Quote?

By Sharon Gibson Posted in Car Insurance News

When you apply for auto insurance, they take many factors into consideration. Insurers have begun to use credit information to price auto insurance policies. If you have good credit, your insurance premium will be lower.

Do All Insurance Companies Check Credit Histories?

Studies have shown that 92 percent of auto insurance companies look at your credit history for high and low risk indicators about you as a person. The insurance companies say that this is to help them decide what they will offer you regarding your premium cost.

This does not discriminate against anyone based on the following: race, age, gender, where you live, where you work, how much you make, or if you are disabled.

Why Is My Credit Report Used By Auto Insurance Companies?

It has been stated by insurance companies, that there is a direct relationship between a person’s credit history and their potential future insurance loss. Insurers feel that if you have had the same credit accounts for a long period of time and you pay your bills on time, you’re more stable than someone that consistently pays their bills late. Auto insurance companies say that it helps them to underwrite someone applying for auto insurance at a cost that accurately reflects that person’s risk factor regarding auto insurance.

Protect Your Credit Rating

A credit score includes the following: identifying information, credit history, public records, and inquiries. To protect your credit standing you should pay your bills on time, don’t obtain more credit than you need, and keep your balances as low as possible. It is important to check your credit record regularly and have any errors corrected as quickly as possible so that your record remains accurate.

You can improve your credit score by paying off any small balances on credit cards, and not carrying high balances on your remaining credit cards. An auto insurance company checking your credit history will not affect your credit rating.

If you have negative credit activity on your credit score, wait a month or so before applying for auto insurance. Clean up your credit first. You can correct your credit score by contacting the reporting credit agency and having the record reevaluated and any mistakes fixed and old information removed.

Related posts:

  1. How Does An Insurance Score Work For Car Insurance?
  2. Why Is A Credit Report Important For Young Driver Car Insurance?
  3. How Does My Credit History Affect My Car Insurance Coverage Rate?
  4. Will Getting Car Insurance Quotes Online Ruin My Credit?
  5. Will My Credit Score Be Used Against Me In A Car Insurance Quote?

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