Does credit score affect car insurance?

People are always looking for the best ways to save money on automobile insurance, and there are many factors that auto insurance providers use to determine a person’s rates. While most car insurance companies utilize credit scores to help determine a person’s car insurance premium, there are some states where using a person’s credit score is not legal. Most states, however, can use a credit score to determine a person’s car insurance premiums, but contacting your local Department of Motor Vehicles if you are looking for the latest information in your state is a good plan.

What Is A Credit Score?

A person’s credit score is used by many companies to determine the likelihood a person will pay back a debt that they owe, whether it is a credit card debt or a loan or mortgage. Other types of businesses can also utilize your credit score in many cases. While a few states do not allow car insurance companies to use a person’s credit score to determine rates, most states do allow statistics of surrounding credit scores to determine prices. Numerous other variables are used to determine a person’s car insurance rates, but if a company has determined that your credit is not up to its standards, they can charge you more in many areas.

A person’s credit score is important, but many companies use a separate score that is different from a person’s FICA score. Your FICA score is likely not a fully reliable way to determine how your credit scores affect you in terms of auto insurance rates. That said, in many cases, it can be used as a general benchmark.

Factors That Affect Your Rates

Many factors affect auto insurance rates, including credit score, driving record, age, gender, and more. Within a person’s credit score, there are many elements. Some of these are used to determine auto insurance rates. This includes the total percentage of credit that is utilized, among other things. By making sure that your credit is not just credit cards, but also loans and other types of credit, can have a positive impact on your rates. Bankruptcies, liens, and collections can also be utilized, though, after seven years, they do drop off of your record.

In terms of car insurance rates in general, a person’s driving record, the number of claims they have made over the last few years, their age, marital status, gender, and other factors are used to determine rates. Each company uses different formulas to determine car insurance rates and Bravo Insurance as the tools you need to get the best prices for car insurance available. Get free quotes for car insurance here and find the best prices available.

What Can You Do If Your Credit Score Changes?

Even after you have found a car insurance plan that suits your needs, you will want to continue to compare rates from different car insurance providers each year. Variables used to determine auto insurance rates change not only for the people applying for car insurance, but the formulas that automobile insurance providers use can also change from one year to the next. Also, if major life events happen, such as marriage, you should contact your car insurance provider and come back to Bravo Insurance to get free quotes. You may be able to find a better deal.

If you notice that your credit score has changed, contact your automobile insurance carrier and see if you can get a better rate. Do this if your credit score has gone up, but if your credit score goes down, you may be best off just keeping the rate that you have. If you cannot get a better deal from your car insurance provider when your credit score improves, go ahead and get quotes from other companies. The tools at Bravo Insurance allow you to easily compare auto insurance plans and prices to find the best rates and policies for you.

Final Notes

Getting free quotes on car insurance can be done quickly and efficiently at Bravo Insurance. Get the top rates for car insurance available from the best car insurance companies, and come back each year to see if you can save even more. When life changes occur, including credit score improvement, the tools here can help you determine which companies can give you the best policies for your situation, but can also help you save the most money. Not all states can utilize a person’s credit score to determine what a person’s rates are, but most can. Paying attention to your credit score and working to improve it if needed can help you in other areas of life as well, including credit card application approvals and loan and financing approvals.