How Drivers With Bad Credit Are Saving On Auto Insurance
Getting and keeping auto insurance can be a big bother, time consuming and even upsetting for many drivers. Because it is also an expensive item, most drivers also need to figure out how to save money on what it costs. A bad surprising factor affecting auto insurance premium cost is your credit score…
Over 90% of all auto insurance companies, large and small, will check your credit and use your credit score as part of the determination of what they will charge you for coverage. Staying one step ahead is crucial for getting the best deal possible! So let’s see how you can find the best personalized quote for your needs…
Always Shop Around
What auto insurance companies will charge you can vary greatly between each company. This is true whether you have good or poor credit. Therefore, you should shop around and carefully compare quotes before choosing a particular auto insurance policy. This is important to do not only when you get a new car that needs insurance, but also when it’s time to renew your policy. Although it may seem to be a bother to do this every year, studies have shown that drivers can often save significant money by shopping around versus just automatically renewing with the same insurance company.
Check Your Credit Report
The major credit reporting agencies maintain a credit history on you and then assign you a credit score based on that credit history. Because of this, it is important to check the accuracy of your credit history. You have the right by law to receive a copy of your credit history and check it for accuracy. If you find mistakes, you are entitled to make the credit reporting agency correct the errors – which should result in an improved credit score and thus a lower auto insurance premium. Doing this before obtaining a new policy is important.
Improve Your Credit Score
You can proactively improve your credit score by taking some of the following actions:
– Make timely required payments on your debts, not just credit cards and loans – but also mortgage payments and bills like cable and phone.
– Pay more than the minimum payment on your credit cards.
– Pay off as many as possible outstanding balances.
– Close out credit accounts that you don’t really need.
– Increase your income to debt ratio by increasing your income and lowering your debt payments.
Lower Your Other Insurance Risk Factors
In addition to improving your credit score, the following actions can lower your risk factor and thus lower your premium:
– Once you accomplish improving your credit score – document it and show it to your insurance company (this may not help immediately, but it should at the next renewal).
– Consider changing your car – some kinds of cars are considered high risk, such as exotic or sports cars. Also, some car models have higher incidents of accidents and thefts than others.
– Arrange to make your premium payment on an annual or semi-annual basis rather than monthly. If you can’t afford to do this, then arrange to make automatic monthly payments via your checking account.
– If you turn 25, get married or move to a more suburban or rural area – promptly inform the insurance company.
– Install security and safety equipment in your car, such as alarms, automatic braking and collision avoidance systems.
– Take and complete an accredited driver improvement course and send the completion certificate to your insurance company. Many places offer these courses for free or for a low cost.
