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How does my credit effect my auto insurance policy?



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Most insurance companies will use your credit to determine your quote. Studies have shown, that over 90 percent of insurance carriers use credit information to determine incoming customers premiums. It is important to understand that your policy is not bases solely on credit, it is also based on your driving record just as much, if not more.


Good credit, and a clean driving history is a great mix for a very great quote. Do not get worried if your credit is not too good, there is a variety of things that are taken into consideration when given a quote. Insurance companies will look at your gender, where you live, driving record, age, and vehicle type just to name a few.


Insurance companies look at your credit, because they want to make sure you are going to pay your premiums on time. They look a lot at your history, because what has happened in your past, is most likely going to continue in the future. So they can tell right from the start if you are going to be a good customer, and not be a high risk customer. The higher risk you are to the insurance company, the higher your quote will probably be.


When given a quote and the insurance companies look at your financial data, and see if you pay your bills on time, that will tell them how you are going to pay the bills for them. If you are a risky driver, and struggle with bills, your premium will be considerably higher.


The best thing to do is get on track with your financial life, and start driving safe. Then you will have the chance for cheaper insurance policies, but in the mean time you will have to get though life with higher insurance premiums.


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