More and more you’ve seen how a poor credit score invades every aspect of your life like a disease. Your credit score is no longer used just to determine your lending prowess for a loan. It isn’t just about purchasing a home, a new car or truck, or even getting financing for new furniture or a vacation.
Your credit score can now be an issue in whether or not you’re able to rent an apartment, it could be a deciding factor when trying to get a new, better paying job, if you qualify for a store card, and now your credit score is included in the risk assessment your auto insurance premiums are calculated through.
That’s right, it is now standard practice to use your credit score to calculate your automobile insurance. It has also become one of the BIGGEST determining factors when calculating cost. Because most Americans only become aware of their credit score when car shopping or when applying for a loan like a mortgage or a home equity line of credit, they’re never aware they’re paying, on average, $1,300 more PER YEAR on automobile insurance than their counterparts who have a better score.
In some states there are even instances of drivers with bad credit and clean driving records paying MORE than drivers with good credit who have been held liable for recent accidents and other driver infractions such as speeding tickets. Think about that for a second – YOU might be paying more for your auto insurance, because you have a bad to moderate, or even a good score, than someone who has been at fault in an accident, or been cited for any number of driving infractions in the past six months.
Unfortunately for you, the consumer, there are no laws forcing the insurance companies to reveal what aspects of your credit report they use to calculate the number they use to determine your credit worthiness. The rest of the world is left in the dark when it comes to this information. So, it’s up to you to make sure your credit report is reporting 100% accurately, and your credit score is as high as it possibly can be.
Monitoring your credit report and score are simple and effective tools you can use to make sure there are no surprises. Your credit score shouldn’t have an impact on your automobile insurance, but that isn’t the reality in which we live. Don’t let bogus credit information and a low credit score cost you thousands more a year in premiums. Find out exactly what insurance companies are looking at when they pull your credit report.