Will I Get a Better Car Insurance Rate With a Good Credit Score
Reader’s Question:
Will car insurance providers here in California give me rates based on how good my credit score is?
Nina
Orange, CA
Yes, part of your overall car insurance quote or offer is based on your credit score. Car insurance companies would want to know, or at least have a good idea, how well you pay your bills or debts. This is indicates how good you take care of obligations and could also reflect on how responsible you are as a driver. Your credit rating is a significant factor in determining your car insurance rates, other factors include: driving history, years of driving experience, and the type of car you own. All of these are evaluated to determine how much risk you pose or how likely you’ll be filing for a claim with them in the future, so the higher this likelihood is the higher your insurance rates may come out as well.
Most car insurance companies don’t necessarily run your credit report, and if they do they are required to advise you prior to doing so, so you don’t have to worry about losing points off your credit score. Generally, insurance companies run the information you supply them through a system, and also with a credit reporting agency or service but not directly as a credit check, which then evaluates under what segment or customer grouping you’d fall on. This will be their basis when they offer you car insurance services.
You should talk to at least five car insurance providers there in California, and get an idea how much they are willing to offer you. Be wary of giving your social security number though and make sure you get a idea if their running your credit or not. Not all car insurance companies use the same credit checking software so may be able to identify which company gives you the best rates by having comparison.