Credit Scores and Premium Rates

You may not be aware of this, but your credit score and premium rates are directly correlated. Your credit score may affect much more than you think when it comes to automobile insurance. Automobile insurers are very hesitant to provide policies for anyone that might be a risky or unsafe driver, and they look for many different indications of potential trouble. A history of accidents, a lot of tickets and various other indicators will make any insurance company hesitant to give you a policy with good rates. But many do not know that your credit score can also affect the rates that a insurance company is going to offer you. If you keep your credit score high it's likely you'll find better rates on insurance. A bad credit score will practically guarantee you higher premiums on your plan.

What Affects Credit?

There are many different things you can do to hurt your credit score. When you are late on payments, charge too much for online purchases or open too many credit accounts, your score can take quite a dive. By being responsible and only spending within your means you are likely to have a high credit score. Credit scores are becoming more and more important these days and it is important that you do your best to keep a high credit score.

Automobile insurance companies often do a credit check before they give you an insurance quote. They perform this credit check because many companies see a low credit score as a sign of irresponsibility, which leads them to believe the individual would be more prone to accidents. The opposite is true as well, if you have good credit you will receive low premiums. The insurance company is looking to take as few risks as possible and will only offer good premium rates to low-risk clients. In short, it can be tough to fins good premiums if you have a low credit score. But don't despair; as there are great ways to still get affordable rates with a bad credit score.

Finding Good Premiums

If you have a good credit score, you are going to have many options for affordable rates. Insurance companies will literally be competing to give you the lowest possible premium rates. However, if you have high credit, you are going to have a much more difficult time.

With a bad credit score, the main option that still exists for you is to find an insurance company that does not perform credit checks. They are not as numerous, but they do exist. A company that does not perform credit checks will not know that you have bad credit and there will be no problem.

Your second option is to do your best to fix your credit. Pay any unpaid loans, talk to a credit counselor and pay payments that you may be late on. It is much easier to let your credit slip than to fix it and the road to good credit may be difficult, but it is possible. Cut up your credit cards that you may use and keep the rest of your new accounts current.

Credit has become an important part of most people's lives. Credit scores and premium rates are directly related in that insurance companies will only offer you good rates if you have a good credit score. With the right amount of research you can find an affordable plan, even with a bad credit score. You may only be a few moments away from finding an insurer that will not perform a credit check and will give you a great premium rate.


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