Impacts Your Car Insurance Quote

Impact Your Car Insurance Quote

If you are shopping around for a car insurance quote and are not happy with the rates that you have been provided, you may be challenged to find a good reason why your rates are so high. Many drivers who have a great driving record and who are not considered to be high risk, such as younger male drivers, may still have higher rates if they have a lower credit rating. It is common practice for many insurance companies to review an applicant’s credit scores before issuing a car insurance quote. With a closer look at how your credit rating influences your car insurance quote, you may be able to take action to lower your rates.

Which State Do You Live In?
There are only three states that have prohibited the practice of insurance companies reviewing credit ratings before issuing a car insurance quote, and these states are Massachusetts, Hawaii and California. If you live in one of these states and have a higher quote, there must be some other reason why your rate is high. In all other states, car insurance companies may review your credit rating before issuing a quote, but this does not mean that all will. If you are aware that you have a lower credit rating, a smart idea is to inquire if credit is taken into consideration before you apply with a specific insurance company. This can help you to more easily identify companies that may offer a lower rate to you.

What Is Your Credit Score?
Another factor to consider is your actual credit rating. Each insurance company has a different magic number that they are looking for. Some, for example, may offer the best rates to those who have a 750 or higher credit score. Others may only be looking for a 680 or 700 score. If you know what your credit score is, you can shop around to find an insurance company that has a requirement that is most ideal for you. Some will not share this information with you before issuing a car insurance quote, but many will provide you with the information you seek upon request.

What Can You Do to Lower Your Rate Quote?
If you have discovered that you have a lower credit rating and you are concerned about your auto insurance premium, it is wise to take steps to improve your credit rating. First, review your credit report to ensure that all information being reported is correct. There are instances when falsely reported information has been corrected, and the individuals were then able to qualify for lower rates on a car insurance quote. If the information being reported is correct, you may need to allow several months or longer for your scores to improve. Focus on paying each bill on time on a regular basis, and work hard to pay down outstanding debt balances. Over time, you will likely see your credit score improve.

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