If you are shopping for cheap auto insurance because you don’t have any insurance or your current policy is about to expire, you want to check your credit score first. How good your credit score is will make a difference in how cheap you get your car insurance.
Credit score is a major determining factor in what insurance companies charge. If you have horrible credit rating doesn’t mean you can’t get auto insurance. It simply means you won’t get the cheapest car insurance. But why are credit scores so important to them?
Because it seen as determining how financial stabile you are. And it isn’t just auto insurance that looks at this information. Your homeowners or renter’s insurance and even life insurance is all dependent on credit scores. Insurance experts say that the lower the credit score is, the more apt the policy holder will be at filing claims or exaggerating claims. They are also more likely to commit insurance fraud and are prone to be late with their payments.
A good credit score for getting cheap auto insurance is around 700 and above. That is seen by insurance companies, and lenders overall, that you are good at managing your credit. A credit score of 600 or lower indicates that a person isn’t good at handling their credit, aka, their finances.
Do All Insurance Companies Check Credit?
No, but most will. They want to know how high of a credit risk are you before they offer insurance. But there are those companies that do not run credit checks, however, they are not going to be the cheapest auto insurance around. They naturally assume if you’re coming to them for cheap auto insurance, then your credit score is poor.