does your credit really have an effect on insurance?
Question by David G: does your credit really have an effect on insurance?
does it really effect your car insurance? im 18 years old and i pay a lot i think…1700 this year. but i read that they check your credit to determine your rates i checked my credit report i had nothing from the insurance company on there. is it because i had no credit when my policy renewed? would i be able to get a lower rate next year because of my good credit history or is it just because im still a young driver and it wont matter? thank you
Best answer:
Answer by Arnold
Yes, most insurance companies will do a credit check, and your payment will be dependent on that.
What do you think? Answer below!
Tags: Credit Effect Car Insurance, Credit Report, Good Credit History, Insurance Company, young driver
Your age and driving record are the most important factor in determining the premium.
Credit history is of secondary importance but like the area you live or the miles driven can also have an impact on the premium.
http://www.carinsurance.com/Articles/content9.aspx.
I personally think it’s completely wrong that they can use your credit score to help determine your auto insurance rates, but they didn’t ask me when they made that rule. However, more than likely, your high rates are the result of the fact that you are young and you are a male. Statistically speaking, young men make up the greatest majority of high-dollar accidents. NOT women, as most people think. So, because of your brethren who like to race, drink, party, and drive, YOU get to pay a higher price for insurance until you hit age 21. For every year you do not have an accident, your rates should start to drop. If they dont, you need to consult with your insurance agent or consider changing companies. It’s in their best interest NOT to give you any rate reductions for safe driving, so dont expect them to call you and volunteer any. You need to keep up with that yourself. Also, do a bit of comparison shopping. If you have Geico or Progressive, I would seriously suggest you shop around. I have a fairly new Ford Eddie Bauer Expedition SUV (a $ 32,000 truck) and I pay about 1/2 what you do. (I have full coverage, and about $ 250,000 in liability coverage.) BUT…..I’m also an older woman, have a clean driving record, live in the country, and have good credit. All those things will affect your payment amounts. You’re just starting out so your rates will be on the higher side. If you can keep from getting any tickets and avoid any wrecks for the next few years, you should then see a dramatic drop in your monthly cost.
There is a chance that bad credit will lead to high insurance premium.