Bad credit can hurt you in a thousand different ways. But can it also ruin your chances of getting a low insurance rate? Unless you live in California, Hawaii and Massachusetts, where the practice is not allowed, the answer is likely yes – the vast majority of insurance companies will look at your credit score when determining your insurance rate.
What Does My Credit Score Have to Do With My Ability to Drive?
Studies suggest that those with a higher credit score tend to get into fewer accidents and cost insurance agencies less money.
Though no one is sure exactly why the correlation exists, researchers at The University of Texas conducted an analysis of 175,647 policies and found that those with a lower credit score were increasingly likely to incur car insurance losses and have higher insurance claims.
Another study done by the Federal Trade Commission further confirmed these findings.
How Does My Credit Score Factor In?
Most insurance companies use credit-based insurance score programs to help come up with insurance rates and eligibility for payment plans. But it is still just one of many variables impacting your overall rate.
So if you have a clean driving record and good credit score, your insurance rate will likely be low. But if, on the other hand, you have a bad driving record, you can still expect your rate to be high, even with a solid credit history.
What Factors Influence Your Credit Score?
To make sure you get the lowest insurance rate possible, it’s important to maintain good credit. Here are a few things you can do to boost your score:
- Make your payments on time.
- Keep accounts in good standing.
- Reduce the amount of debt you owe.
- Develop a strong credit history.
Because of The Fair Credit Reporting Act, you can receive your credit report online for free, but you will have to pay if you want to get your credit score.
Get Great Coverage at a Competitive Rate!
When selecting an insurance provider, don’t just look at the rate, but find out the amount of coverage you will receive as well. If you want the best car insurance coverage at the best rate, call Royce Williams today! We will help you find the right insurance policy to meet your specific needs.
Learn more about how you can save money on car insurance by checking out this FREE special report!
