A person's credit score has a significant impact on their life, and people pay attention to it and try to improve it to get better rates on loans and higher likelihood of approval. In some states, your credit score can also affect how much you pay on your automobile insurance premiums. There are a wide variety of variables that can affect your car insurance premiums, and sometimes people with poor credit scores can find themselves fighting an uphill battle to get back on solid financial footing.
Unfortunately, car insurance providers can elect to raise your premium or cancel your policy if you have a poor credit score. It is also possible for them to refuse to insure you altogether. If you live in a state where your credit can be used to help determine your car insurance rates, you will be well served to shop around for a company that provides no credit check auto insurance.
Why Is Your Credit Score Important To Insurance Companies
Car insurance providers spend a lot of time and money researching the risks of groups of people that they insure and how they correlate. The credit score that people have can be an indication to automobile insurance companies of your credibility, financial stability, and other associated factors of risk. People who have credit issues are more likely to make a claim, and auto insurance companies are aware of this. Using the statistics that are available to them, they have determined that people with lower credit scores are not only more likely to file claims, but are more likely to engage in fraud, be late on payments, or exaggerate their claims. Unfortunately, even people who are completely honest in nature are affected by these types of statistics.
Having a low credit score does not mean you will do any of these things, or even that your insurance company will be taking on a higher risk by providing insurance to you versus someone who has good credit. It's not a personal thing; insurance companies are incredibly numbers based and utilize statistics to determine rates. By predicting behavior and risk, they can best set their prices.
It is also important to keep in mind that your credit score is one of a large number of variables that are used to determine your rate. Your driving record, marriage status, the model of vehicle, and the number of miles you drive each year are just a few of the extremely long list of variables car insurance policy writers use to determine how much you pay on your automobile insurance premium.
How To Find Out Your Credit Score
Before seeking out automobile insurance, it can be an excellent plan to seek out your credit score. In the United States, each person gets one credit check per year for free. You can pay for credit transcripts and information if you are seeking it out additional times. There are three major credit rating agencies in the United States, Trans Union, Equifax, and Experian. Reaching out to these companies is a great way to contact the credit reporting agencies directly for your information.
Where To Find An Insurance Company That Does Not Do Credit Checks
For the most part, automobile insurance companies are going to ask you for information that will help them determine your risk level before offering you a quote on a car insurance plan. That said, there are automobile insurance companies out there who never do credit checks on the people they are looking to write auto insurance plans for. If you have checked your credit score, and whether car insurance companies in your state can utilize it, and have decided that your credit score might negatively affect the cost of your insurance premiums, finding a company that does not do credit checks when determining rates is likely to be a good idea.
This site can help you reach companies that provide quotes for insurance premiums without running a credit check. A little research can go a long way in determining which companies do this, and you can stand to save a lot of money by spending a little bit of time. A few of the companies that tend not to use credit checks to determine rates include Allstate and Progressive. There are other companies as well, and it is a good idea to look into the latest information available. Automobile insurance companies tend to change the algorithms they use to determine rates reasonably often. Another way to determine if a car insurance company might be looking to run a credit check on you is if they ask for your Social Security number when you go to get a free quote online or in person.
Using the tools provided here, and the information brought to you on blogs on this site, you can make the most educated decision possible on your car insurance needs. For many people, no credit check auto insurance is the best option.