What auto insurance companies use a credit score?

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Things to Remember...

  • Determining your auto insurance policy rates involves far more than your personal driving record and what kind of car you drive
  • It is estimated by a number of insurance industry experts that approximately 90 percent of insurance companies now use credit scores
  • If information about using credit scores is not on your state insurance website, call the state department of insurance and ask

Auto insurance is exceedingly important if you own a car. It provides you with protection if you are involved in an accident and can also provide you with protection if your car is a total loss.

Having the right auto insurance can save your finances, so picking the right insurer and getting a good policy is indispensable.

In today’s world, determining your auto insurance policy rates involves far more than your personal driving record and what kind of car you drive.

Most auto insurance companies also check your credit rating and a number of other variables when determining your auto insurance premium rates.

Our FREE auto insurance comparison tool can help you save money on rates when you enter your zip code above!

Insurance Companies and Credit Scores

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In recent years, it has come to light that individuals with low or poor credit scores tend to also file more auto insurance premiums.

Since this information became known in the insurance industry, more and more companies have included your credit score as a factor in setting auto insurance rates.

Keeping your credit score in check has become a standard part of maintaining low car insurance rates.

It is estimated by a number of insurance industry experts that approximately 90 percent of insurance companies now use credit scores as part of how they determine policy premium rates.

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Finding an Insurance Company that Does Not Use Credit Scores

Although almost 90 percent of insurance companies use credit scores to determine car insurance rates, if you have poor credit, all is not lost.

There are several ways to make sure that your credit score cannot affect your auto insurance more than it has to.

Find an insurance company that does not use credit scores in setting premium rates.

You can contact your state department of insurance and find out what car insurance companies do not use credit scores.

In many states, this information is available online through a state insurance website.

If information about using credit scores is not on your state insurance website, call the state department of insurance and ask.

Another method of finding companies that do not use credit scores for auto insurance rates is price comparisons.

If you know you have bad credit, you can use an insurance comparison website to find get quotes from numerous insurance companies at the same time.

In many cases, if you receive an auto insurance quote that is lower than other insurance companies, you can make a fair guess that they have not factored in your credit score as part of your car insurance premium rate.

Reviewing Your Credit Score

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Legally, you are entitled to one free credit report every year.

You can get a copy of your credit report over the internet from any of the credit agencies including:

You are also entitled to a free copy of your credit report if you are denied credit or insurance because of your credit.

Once you receive a copy of your credit report, evaluate it for errors. It is very common for credit reports to have multiple errors on them and these errors can affect your ability to get credit, insurance and even be offered employment.

If you see errors, you can challenge them by writing the reporting agency.

The credit reporting agency must conduct an investigation and correct any errors within 30 days.

They must send you a new copy of your credit report indicating the results of the investigation and any changes made to the report.

Finding Good Insurance Rates

Once you have your credit score in line, then you can begin to look for good insurance rates.

One of the first places to look is with your current insurance carrier.

It is a good idea to evaluate your auto insurance rates each time your policy is up for renewal.

You may find that your insurance needs have changed or that you are eligible for rate discounts that can be applied to your policy.

Independent Insurance Broker

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Another source for competitive auto insurance rates is an independent insurance broker. Most independent car insurance agents represent multiple insurance companies.

This allows them to compare rates and find you the best insurance policy for your specific needs.

Often, an independent insurance broker will offer suggestions to keep your rates down for your specific situation.

Many people find that they enjoy the personal service that an independent insurance agent can provide to them when compared to working directly with a large insurance company or just comparing rates online.

Auto Insurance Comparison Website

Car insurance comparison websites can also be an excellent source for insurance policy rates.

In many cases, you will only need to enter your personal information including:

  • Your social security number
  • Drivers license number
  • Vehicle identification number (VIN)

You are also usually asked for contact information since insurance companies and agents will be contacting you for further details and to answer any questions you might have about the rate quotes you receive.

Shop Around

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Credit scores are certainly an important part of determining your car insurance rates. By shopping around, you can find auto insurance rates by comparison and get the best rates possible.

You should also review your credit report every year to catch errors and mistakes that may appear on your credit report.

It can also influence your ability to get a job, where you live and how much you pay for auto, life and homeowners insurance.

Our FREE auto insurance comparison tool can give you peace of mind about your auto insurance rates when you enter your zip code below!

FREE Auto Insurance Comparison

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