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The article has been updated successfully but requires approval before it is published.Last Updated 25th of August, 2010
Can an auto insurance company raise my rates for credit history problems?
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Yes, it can. But, don't be frightened if you've had some late credit card payments recently that could lead to a poor credit score. It's unlikely your premiums will experience a large jump at renewal time simply due to this.
That's because car insurance companies determine whether to issue a policy or what rates to charge based upon many sound statistical data points. Your credit history or credit rating is just one of the factors considered. And, it's possible your auto insurance provider may not even consider this information.
So, as long as you haven't caused an accident, accumulated any traffic violations, or taken any other actions that could flag you as a higher risk, your credit score alone shouldn't lead to elevated insurance rates.
Well, insurance companies have mountains of statistical proof saying that drivers with poor credit histories tend to be poorer drivers, making them more likely to cause an accident, and cost their company money. Hence, most auto insurers consider credit histories when evaluating prospective or current customers.
And, don't forget to compare insurance quotes every now and then, too, as you might be surprised how much money you could save.
That's because car insurance companies determine whether to issue a policy or what rates to charge based upon many sound statistical data points. Your credit history or credit rating is just one of the factors considered. And, it's possible your auto insurance provider may not even consider this information.
So, as long as you haven't caused an accident, accumulated any traffic violations, or taken any other actions that could flag you as a higher risk, your credit score alone shouldn't lead to elevated insurance rates.
Why Car Insurers Look at Credit Reports
You might wonder why an insurance company would even care about your credit score. After all, what does credit have to do with driving? Seems like a reach, doesn't it?Well, insurance companies have mountains of statistical proof saying that drivers with poor credit histories tend to be poorer drivers, making them more likely to cause an accident, and cost their company money. Hence, most auto insurers consider credit histories when evaluating prospective or current customers.
Viewing Credit Reports
All this points to another good reason to periodically review your credit reports for mistakes. Remember, a simple clerical error can sabotage even an outstanding credit rating. Plus, you can obtain credit reports for free.And, don't forget to compare insurance quotes every now and then, too, as you might be surprised how much money you could save.
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