Jessica Sautter has a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Written by Jessica Sautter
Content Writer Jessica Sautter

Natasha McLachlan is a writer who currently lives in Southern California. She is an alumna of California College of the Arts, where she obtained her B.A. in Writing and Literature. Her current work revolves around auto insurance guides and informational articles. She truly enjoys helping others learn more about everyday, practical matters through her work.

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Reviewed by Natasha McLachlan
Content Writer Natasha McLachlan

UPDATED: Oct 1, 2020

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For those who want to purchase inexpensive car insurance, one of the factors that is taken under consideration is your credit score. The question that is often asked by people is, does credit score affect car insurance? This article tells you the truth.

What is a Credit Score?

Basically, your credit score is the summation of your record in paying back loans, making payments on insurance, utilities and other necessities that demonstrate you are a good risk to lenders. The relationship between credit score and car insurance is a more indirect one than trying to obtain a loan.

However, it is a factor that insurance companies use in setting their premiums based on your ability to make regular payments and the relationship between those who are more likely to have accidents.

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Does Your Credit Score Affect Car Insurance?

How to Improve Credit Score from Poor to Excellent

When it comes to does your credit score affect car insurance rates, the answer is yes. Of course, how much your credit score will affect car insurance premiums will depend on a number of factors. This is because credit score is but one of several considerations that insurance companies will make in their evaluation.

Generally speaking, a poor credit score may result in paying rates that are 5% up to 15% or more depending on the circumstances. In most cases, if you have a poor credit score and have kept up with your insurance payments then the impact may not be so bad.

However, if you have a history of not paying your insurance on time, then your rates may indeed be considerably higher if you are paying month to month. This is because the monthly rate is really a loan by the insurance company that includes interest.

Of course, the credit score impact on car insurance will also include other factors such as your age, driving record and type of vehicle you own. So keep this in mind when searching for car insurance.

How to Improve Credit Score?

Does Credit Score Affect Car Insurance Rate?

There are several ways of improving credit report for car insurance starting with getting the latest copy of your credit score. In the report you can see what is dragging down your score so you can make the appropriate payments so that they are removed. You may find that some information is out of date and that can be removed as well.

Generally speaking, it is best to address your credit report one issue at a time starting with the big factors and working your way down. In addition, you can establish better credit by paying your bills on time, keeping your revolving debt down to a minimum and paying off loans so that can be reflected in your overall score.

Once you have improved your credit score, ask your insurance provider to check out the new history and review it for a lower premium. In most cases it will take a little time for improvements to be reflected on your credit report. However, once they do appear you should enjoy greater savings on your insurance premiums. In addition, paying your insurance bill all at once instead of a month at a time will help lower your overall bill.

Can I Get Car Insurance without Credit Check?

Yes, you can. If your credit score is very poor, the best suggestion would be to go with no credit check car insurance from a reputable provider. Check out here to learn how to obtain car insurance without the provider checking out your credit report.