How Bad Credit Impacts Your Auto Insurance Rateadmin
Here’s how bad credit affects your car insurance costs.
When you apply for auto insurance, your insurance provider will consider several factors when they calculate your premiums. One of the things that they will consider is your credit score. Many drivers are surprised to know that auto insurers check their credit and they worry about how their credit score affects their coverage rates. Here’s how having bad credit affects your premiums.
Car insurance providers calculate premiums based on how much risk the driver poses to the company. Drivers with the lowest risk get access to the cheapest rates. In contrast, high risk drivers get charged more for coverage. But how does your credit score factor into the insurance company’s risk assessment? If you have bad credit, then this could signal that you have trouble paying your bills and staying out of debt. To insurance providers, this might mean that you are likely to fall behind on your insurance payments. To protect their financial resources, the insurance company might end up charging you more for your insurance.
Additionally, research suggests that people with bad credit could be more accident prone. So, if you have bad credit, then insurance companies might end up charging you more because they believe that you are more likely to file a claim for an accident. Ultimately, if you want to save on your auto insurance, then one of the things that you need to do is improve your credit score.
This is how bad credit affects your car insurance costs. Do you have additional questions regarding your auto insurance? If so, then contact the experts at Staybull Insurance. We are ready to assist you with all your insurance needs today.