Many personal car insurance companies
consider your credit information when determining how much premium to
charge for your insurance. So if you are calling around for new car insurance, keep in mind that many insurers are looking at your credit history to determine your car insurance rates.
The reason some insurance companies use
credit information is because they feel there is a direct correlation
between a consumer's credit history behaviors and expected claims that
may occur.
Many insurance companies still use your age,
driving history, type of vehicle, where you live in determining how much
you should pay for your insurance. Therefore, if you have not
established a credit history yet, the companies that use credit history
may not be best for you.
The companies that do use credit scoring will
still use other factors that determine your premium. They will also use
your age, driving history, type of vehicle, where you live in
determining how much you should pay for your insurance.
If you feel that your credit history is
better than the insurer can find, make sure the insurer has your correct
name, address, social security number, and date of birth.
Some insurance companies will look directly
at your actual credit reports when determining your rate, however most
will use what is called an "insurance credit score." An insurance credit
score is developed by using statistical techniques and methods to
predict the likelihood a consumer will have a higher than anticipated
losses. These are similar to what lenders use to predict the reliability
of an applicant repaying a loan.
