How does my credit history affect my car insurance rates?

There are several factors that impact your car insurance rates, including the credit history information that your insurance company looks up when you are asking for coverage. Although your credit score is not the only factor that may impact your rates, it does play a significant role in the process of providing coverage.

Low-Credit Correlation

A key reason that your credit score can impact your rates directly is due to the statistical correlations that insurance companies have identified. If you have a low credit rating, then you are more likely to file a claim when compared to an individual who has a high credit score.

Depending on the score and the details of your driving history, the exact impact on your policy may vary. The correlation is based on the averages and the total amount that is provided in a claim.

Other Factors

While your credit history can play a role in the insurance rates that you are offered, it is only one of the factors that may be considered when you are applying for coverage.

Other factors, such as your driving history, your age and the number of years that you have been driving may also play a role in the coverage that you are offered. In general, an excellent driving history over several years can help keep your rates down, even if you have recently faced some unexpected financial challenges that have impacted your credit rating.

It is hard to protect against damages to your car, especially if you are struggling to find affordable auto insurance and a plan that addresses all of your concerns and goals. Fortunately, it is possible to compare your options to find the best rates. Contact us to speak to an agent for more details.

One thought on “How does my credit history affect my car insurance rates?

  1. While it’s a good idea to pay all your bills in a timely manenr, things like your insurance, rent, utilities, etc don’t report timely payment to the credit bureaus and don’t impact your credit score.

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