How Does Credit Affect Auto Insurance?

If you have poor credit, you car insurance company may actually raise your rates. This probably does not see fair because most people think that their premiums should only be affected by their driving record. However, insurers consider a lot of things when they decide how much to charge you for a policy. Financial rating scores are not the most important thing that they consider, but a low score can mean you will not qualify for the very lowest rates. Insurers have won the right to use your financial position as a way to determine how risky you are to cover.

Can You Get A Policy Without A Credit Check?

Some insurers advertise policies that do not need a credit check. But you can bet they already assume that people with financial issues get attracted to advertisements like this. They have surely already factored that into their rates, so these companies are not likely to give you the very best rates either. You probably should not choose to purchase a policy from an insurer that advertises they do not need to check your credit scores as a way to save money.

This does not mean you have to accept very high auto insurance premiums thought. While financial ratings are one cause of higher rates, they are also balanced by other things. It is also not the largest factor that insurers consider. Your age, driving history, and the safety rating of your vehicle are probably much more important. You may also be able to balance out the increased rates by qualifying for discounts. For example, you may be able to get your rate lowered if you bundle multiple policies. It is important to discuss your unique situation with a qualified agent or company representative.

This is why I would tell any vehicle owners to shop around for good rates instead of just falling for the first attractive advertisement they find on the Internet, TV, or elsewhere.

A good driving history and a safe car may balance out some credit issues, even if you have them! Companies that do check your scores may still be able to offer you a better deal.