Why Your Credit Score Can Affect Car Insurance Rates by 50%
Having a bad credit score can increase your car insurance rates by 20 to 50 percent.
But why does your credit score have such a large impact?
Several years ago, car insurance companies started looking into credit scores to see if there was any correlation with the number of claims.
They discovered that people with poor credit scores were much more likely to file auto insurance claims.
Consumers with the worst credit scores were almost twice as likely to file insurance claims compared to those with the best scores.
This is a huge difference!
If that weren't bad enough, they found that drivers with the best scores were involved in 40% fewer accidents.
If you have bad credit, there are ways to improve your score.
In addition, there are still a handful of insurance companies that don't use credit score as a factor. This is why it's so important to comparison shop, especially if you have bad credit.
You need to cast a net far and wide in order to "catch" an insurance company willing to offer the best rates for your particular situation.
My Recommendation for Car ShoppersTrueCar No-Haggle, CarsDirect, and NADAGuides are the quickest way to see the lowest car prices in your area. These sites show you no-haggle prices from dealers closest to you - and the deals are usually really good. This should be the first step you take when negotiating your car price. Follow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan
Each week, I'll keep you up-to-date on the latest car deals and news that might affect your purchase. This includes...
- Best Rebates, Incentives, and Lease Deals
- Latest Car Buying Scams and Tricks
- The Best & Worst Time to Buy a Car
- Which Cars You Should Avoid