Why Your Credit Score Can Affect Car Insurance Rates by 50%Most people are surprised to learn that their credit score can have a huge impact on the cost of car insurance. (See: What is a Credit Score)
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.
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