Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Oct 13, 2020

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Here's what you need to know...

  • Requesting quotes for car insurance doesn’t affect your credit score
  • Inquiries for other financial products like personal or vehicle loans will affect scores
  • Poor credit could make a policyholder a higher risk in the eyes of the insurer

When you’re applying for auto loans to find the best possible deal, it’s important that you know how each of these credit inquiries can have an effect on your credit.

While car insurance is a financial product, it’s not a loan and doesn’t have a direct effect on your credit rating or file.

Auto insurance quotes, which are just estimates on how much you’ll pay for personal auto insurance in your household, are designed to help you make the best decision as you build a policy.

While your insurance doesn’t affect your credit, it’s possible that your credit can affect your insurance.

Start comparing car insurance rates now by entering your zip code above!

Table of Contents

What You’ll Need to Provide for Accurate Auto Insurance Quotes

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When you’re requesting quotes for insurance, you’re not even asked to provide a social security number.

This should give you peace of mind in knowing that the inquiry won’t get sent through to agencies like Experian, TransUnion, and Equifax.

While companies don’t need your social, they’ll need other bits of personal information to give you accurate quotes.

The information that’s used during the quoting process is used strictly to determine how much of a risk you present to the company.

The more likely you are to file a claim based on what the statistics say, the higher your premiums will be in the end.

Since premiums are risk-based and personalized, it’s important that your upfront and honest when answering quote or application questions.

Here’s some of the information that you’ll need to have handy for your quote:

  • Year, make, model, and VIN of the vehicle
  • Safety features and aftermarket installations on the car
  • Date of birth and years of driving experience for each driver
  • Driver assignments for each vehicle you are quoting
  • Odometer estimated annual mileage and usage for each vehicle
  • Zip code where vehicles are primarily stored
  • Driving record of each listed driver with dates for each violation
  • Claims history for each driver
  • Full-time students grades for Good Student Discount
  • Date of driver safety training or mature driver training for discounts
  • Types of coverage and levels

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Is credit used to calculate your premiums?

Even though quotes and applications for auto insurance don’t affect your credit, that doesn’t mean that having bad credit can’t affect your rates.

In many states, companies are allowed to use your credit file and different bits of information in your credit history to decide whether accept or reject your application.

In other states, the companies in the marketplace can actually base rates on what is found in your credit history.

While it’s not the traditional credit score that’s used, it’s something similar that’s called an insurance score.

The insurance score is a confidential ranking that measures a policyholder’s financial history and their affairs.

The insurance score could include various information on your financial affairs and the stability of your report when assigning a credit score.

Here’s a breakdown of how much different FICO score factors weigh in when assigning a credit-based insurance score:

  • Payment history – 40 percent
  • Outstanding Debt – 30 percent
  • Length of Credit History – 15 percent
  • Pursuing New Credit Recently – 10 percent
  • Credit Mix – 5 percent

The insurer can’t use either your race or income as a determinant because it has been found that this unfairly discriminates against people during the underwriting process.

Other factors that can’t be used to determine your score include:

  • National origin
  • Religion
  • Gender
  • Marital status
  • Age
  • Occupation
  • Employment history
  • Location of home
  • Rental agreements
  • Child support
  • Participation in a credit counseling program

Why does credit have a bearing on insurance rates?

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Having poor credit can really affect your financial life. If you have delinquencies or defaults, you might be wondering why that’s relevant to insurance companies.

While you might think that your ability to pay doesn’t have anything to do with risk, the statistics say something different.

Based on what insurers have found, drivers who have low credit scores with blemishes are high-risk.

This is because the individuals are highly more likely to file a claim for a moderate amount of damage than someone with good credit.

Since individuals with low credit scores are seen to be financially irresponsible, it’s assumed that they won’t have the money to pay for the damages themselves.

This puts a greater burden on the insurer which then leads to higher insurance rates for those with a low insurance score.

While this isn’t allowed in all states, if you live in a state where credit can be used, you should know how all of this works.

How can you find out your insurance score?

While your score is a confidential rating, The Fair and Accurate Credit Transaction Act of 2003 allows you to order a free credit report every year from all three reporting agencies so that you can look for inaccuracies.

Take a look at the different pieces of credit information that’s used when assigning an insurance score and then you can see why your score might be driving premiums up.

Now that you know that getting a handful of quotes won’t have a bearing on your credit, it’s time to start shopping the marketplace.

It’s best to get as many quotes as possible with several carriers to find the best rates.

Luckily, you can use online rate comparison tools that will give you quotes by only asking you to complete a single quote form.

Start using intelligent tools to your advantage and find competitive insurance rates. Start comparing car insurance rates now by entering your zip code below!