How Does Your Credit Score Affect Your Car Insurance

2. How Does Your Credit Score Affect Your Car Insurance?

3. 1: Do You Need Good Credit to Buy Car Insurance? When it comes to your financial health, one of the most important numbers you need to know is your credit score. A credit score can have big implications for your personal finances, particularly with regard to your future car insurance rates—but what is a good credit score to buy a car? Read on to learn more about how different credit scores can affect your premium payments, as well as how you can boost your score if it’s not where you want it to be! • A majority of car insurance companies use credit-based insurance scores to determine rates, but not all do. Some go with geographic regions, personal characteristics or other factors in determining premiums. For example, if you live in an area with a higher rate of accidents and traffic tickets, you may see more significant jumps in your rates than someone who lives on an off-the-beaten path somewhere where roads are less traveled. One of these variables is out of your control—your geography—but it’s possible to improve both factors through responsibility and diligence. A clean driving record can help improve your premium prices while taking advantage of discounts will also chip away at costs.

4. 2: Myths About Good Credit A lot of folks seem to think that good credit has a direct correlation with being safe or smart with money. However, many major studies have proven that assumption to be false. One study by Experian, for example, found that having a good credit score did not equate to being financially responsible. In fact, some consumers with high scores actually demonstrated financial irresponsibility in other areas of their lives. Furthering that point is another study done by Experian , which found that nearly 1 in 10 Americans have no idea what their actual FICO score is; and about 1/3 of those who do know what their scores are don’t know how it affects them when making financial decisions. (And what’s worse: Many people believe there is one credit score that everyone sees. That’s also false.) Knowing more about your credit—and how it will play into certain financial situations—can help you make smarter choices. Whether you’re trying to buy a house, get approved for loans, or buy car insurance (or any combination thereof), understanding your score can help ensure you find an option best suited for you. . What’s more important than knowing what makes up your total number? Knowing why. We’ll explain…

5. 3: What is a Good Credit Score on Your Car Insurance Application? As its name suggests, your credit utilization ratio (or CUR) helps lenders determine whether they should approve new lines of credit based on their analysis of both recent and overall account activity.

6. Why is My Credit Score So Important When Buying a Car? Car insurance companies are concerned with not only how well you drive, but also how much risk you pose to them when it comes to paying for your automobile repairs. If they feel like you might not be able to afford those repairs, they may try and jack up your premium. A low credit score may be considered as such a risk factor. You can check out some sites like Grand Lux Credit that will tell you where you stand with your current scores and what improvements can help bring down rates. It’s also a good idea to look into some of those nice new online banking apps that offer free on-the-go credit monitoring too. The more information you have at your fingertips, The better. Good luck! • Because bad credit is risky business (for both parties involved). The other party wants to know that if there’s an accident and their car gets totaled, you can actually pay off any outstanding debt related to it. Bad credit represents financial instability — thinks lack of savings — which could lead someone to default on loan payments in order to put food on the table for their family.

7. 4: Does Having Bad Credit Affects My Rates? However, there are tools available to allow people with bad credit histories finance cars from reputable dealerships using special financing techniques without wrecking their scores even further. • A lot of factors go into determining how much you pay for your auto insurance. Your age, zip code, and occupation all play a role in determining where you fall on an auto insurer’s price scale. Your gender also plays a role: You might be familiar with all-female or ladies car insurance groups that advertise cheap rates (which they usually aren’t). And then there’s whether or not you have bad credit — which can cost you up to 40% more for coverage. Luckily, it’s possible to get cheap car insurance with bad credit — once you understand how it affects rates and why some insurers charge higher premiums to people with poor scores. (As always, check out Nerd Wallet’s Best Car Insurance Companies ranking for recommendations.) With any of these insurance companies, see if you qualify to save hundreds by bundling multiple policies together.

8. Contact Us: • Address - 13100 Wortham Center Drive, 3RD FL, Houston, 77065 • Email - info@grandluxcredit.com • Phone - (888) 766-2919 • Website - https://grandluxcredit.com • Blog - https://grandluxcredit.com/how-does-your-credit-score-affect-your-car-insurance/#contact