Auto Insurance Quotes and Credit Score

There are many things that will affect your online auto insurance quotes. Starting with your car’s engine volume to your place of residence, insurance companies use your personal information to determine how much of a risk you are as a car owner and how much you should be charged respectively. But among all the factors that affect your rates there’s one that seems to be out of place and may cause some people to contemplate about privacy invasion. We are talking about credit scores.

Yes, that’s right, insurance providers use the customer’s credit score when calculating a person’s auto insurance quotes. Even if you aren’t asked to provide such information while quoting the insurance company will still get the necessary data. How? By simply inquiring with the credit bureau. And if you think that’s illegal you may be disappointed because the insurance companies have the permission to inquire about a person’s credit rating without disclosing this information to third parties. But why do they do it in the first place?

It may look like there’s no connection between a person’s credit score and the risk they pose while behind the wheel. However, it was statistically proven that people with poor credit rating tend to file insurance claims more often than people with good scores. And because of such a direct link insurance companies use credit score as one of the main factors determining a person’s insurance rates. The weight of this factor varies from company to company and at some insurers it may be insignificant while at others it can seriously affect the person’s insurance costs. There are also certain companies that don’t use credit score when calculating rates, still the majority does.

But is there any way you can save money on auto insurance with the use of credit rating? As said before, the better the score the lower are the rates charged by the insurance company. So it would be evident to suggest that by improving your current credit rating you can lower your premiums. If you already have a good score your rates will always be more competitive than people with lower scores have. And if your score isn’t as good as you would wish it was there are different ways to improve it. Start with getting a credit report and analyzing it. You may want to address a financial specialist in order to get professional help with your report.

There are usually different things that can be improved in the report and once you take all the measures your online auto insurance quotes will start getting lower every time you get them.

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