What is a good auto insurance score?

Getting loans, whether financing your vehicle or getting a mortgage, is affected by your credit score, among other things. Auto insurance rates are also affected by a person’s credit score, as well as numerous other factors. By paying your bills on time, having lower credit card balances, avoiding defaulting on loans, and doing other things to protect your credit, you could see lower prices for car insurance overall. Your credit score is not the only thing that affects what you pay for car insurance, however. Another score that is utilized is your auto insurance score.

Differences Between Credit Score And Auto Insurance Score

Credit scores are often looked at to determine whether or not a company wants to do business with you. Also, it tells companies what type of customer you are and what your credit behavior is. Statistically speaking, a person’s credit score can affect the likelihood of them filing a claim with insurance providers. The types of claims a person makes can also be hinted at using a person’s credit score. If a person has a higher credit score, they are often seen as a lower risk to insurance companies, leading to lower rates on average.

An auto insurance score is used to predict the risk of providing car insurance to a person. There are many factors used to determine risks and rates, including a person’s driving history and the number of claims a person has filed in the last few years. Other elements that can affect a person’s car insurance score include whether or not they have public records to their name. This can include things like bankruptcy, liens, collections, foreclosures, and more. Each of these things is considered public record and can bring a person’s automobile insurance score down.

If people are on time with their payments consistently, it can result in a higher score overall. The length of time a person has had a credit history is also essential, as well as how many credit cards they have open and how much these credit cards are used. Also, the type of credit a person has is essential. If a person’s credit report includes not only store credit cards, but also student loans, auto loans, home loans, and more, their credit score can benefit.

Lastly, the amount of unused credit a person has is used. Not only is what you currently owe taken into consideration, but it is compared to your total extended credit overall. Ideally, people will want to keep the amount of credit they use in terms of their total extended credit below 30%. Using these factors, a person’s auto insurance score is determined. Some factors cannot be used to determine auto insurance scores, including not having enough credit history, medical accounts that are in collections, as well as bankruptcies and collections that are older than seven years, and more.

What Is A Good Auto Insurance Score?

The credit score a person has may affect a person’s auto insurance score, but they are different things altogether. Each of these can have an impact on what you pay for automobile insurance. A person’s credit score reflects on a person’s credit and can often be used to predict whether or not a person will default on their obligations. A person’s insurance score is also important and predicts the risk of a person filing a claim in the future. There are reasons that people look at both of these types of scores.

A good score can be different depending on which company is calculating your score. There are two main companies that calculate scores, including Fair Isaac Corporation and ChoicePoint. Good auto insurance scores start at a score of 700 for both companies, though it can be dependent on the company that is pulling your score as well. Each car insurance company uses different formulas to determine rates, and each also has different opinions on what is considered a good score.

Ways to Improve Your Insurance Score

One of the best ways to improve your car insurance score is to improve your credit score. This is something that can be done over time. A person’s credit score affects both the underwriting process and what a person’s rate is when they are given a quote. Some of the ways a person can improve their credit score, as well as their auto insurance score, is to pay down debt. In addition, talk to authorized users on your credit cards and encourage them to pay down the debt they are adding to the card. Utilizing auto payment can also help a person improve both of these scores by ensuring that payments are being made on time.

Other strategies to help improve the scores include not closing unused credit cards and adding different types of credit to help over time. Regardless of the auto insurance score you have, get the best prices available for auto insurance at Bravo Insurance. With the free quotes for car insurance you get here, you can get the best rates available for car insurance for your situation.