Can a low credit score impact your car insurance rates?
The obvious answer is that your credit score in most cases does have a dramatic affect on your car insurance rates. If you have a score well below 500 you can expect to pay 25 to 75% more on your car insurance premiums than someone with a credit score of 650 or higher. It is important that you maintain a high credit score especially if you are considering comparing auto insurance prices and you are thinking of switching. If you want to switch insurance companies they will most definitely be looking at your credit score and factoring that into your pricing (along w/ your driving record, age, state and a number of other important variables).
To make sure you keep your credit score high, you can do a number of smart things each month. First off, pay your credit card bill on time – many people don’t realize that missing payments on their credit cards or habitually paying late can have an adverse affect on your credit score. Be responsible with your money, try not to overspend each month and get behind the eight ball when you’re faced with mounting credit card at the end of the month, this will definitely drive your credit down. Don’t open up too many credit cards in a short period of time. Having too large of a credit limit that you are not using can have a detrimental effect on your credit score.
If you already have a low credit score, all is not lost. You might have to work a bit harder to get a reasonable auto insurance quote, so get 4 or 5 quotes instead of just 2 or 3 that someone with good credit might be able to get by with. Ask the insurance company how much they weight the credit score in your price quote. You might not be able to get an exact amount, but it will help you get an idea of what you’re going to pay. If you’re really lucky you might be able to get a quote from a company that doesn’t take your credit score into account. Cure auto insurance offers protection for your vehicles in New Jersey and Pennsylvania and their main selling point is that they don’t check your credit score when offering you a rate quote.
Don’t be afraid to go online and do a car insurance comparison. Even with a low credit score, it will only take you an hour or two to get quotes from AllState, Progressive, Geico, Farmers and all the major insurance companies. If you get a high price quote and it doesn’t make sense to switch carriers, ride out your policy with your current company and try back in 6 months. You can always work with a credit counseling service to improve your credit score and you might be saving money in no time!
