Are there car insurance companies that do not consider credit scores when calculating car insurance rates and issuing car insurance policies? Car insurance companies are all about risk. They assume the risk that you may be responsible for a car accident while driving, or incur some other type of loss involving your vehicle, in exchange for a premium that you pay monthly or yearly.
Rates are set according to statistics that help determine what type of risk a driver actually presents. There are a variety of factors that are considered in setting rates. They include age, gender, experience, claims history, driving record, where you live, the type of car you drive and more.
One of the newest variables that insurers now consider in order to set car insurance rates is your credit history. How you have handled your credit in the past is a big factor in how much you will pay for auto insurance. To see just how cheap of a car insurance rate you can find then be sure and compare rates from many top companies online using our free car insurance comparison tool today!
Understanding Why Credit Affects Insurance Rates
Credit scores are used by most companies in order to set rates. It is a fact that credit scores have a strong correlation with a person’s likelihood to make insurance claims. In fact, those with poor credit scores are much more likely than those with good credit scores to make claims. Since statistical evidence of this fact came to light, more and more insurance companies have taken to using credit scores as one of the factors to be considered when determining how much a client will pay for car insurance coverage. Some industry experts state that more than 90% of companies now use credit scores in determining rates.
Finding a Company That Does Not Consider Credit Scores
Since the percentage of companies using credit scores in rate setting is so high, you may find it difficult to locate one of those less than 10% of companies that do not consider it. Finding one that actually serves your area may be impossible in some cases. However, the best way to find out which companies in your area off no credit check auto insurance is to enter your zip code in on the top of this page and compare quotes and rate details from many different companies. By doing so, you will find insurers that either completely ignore credit ratings when it comes to insurance quotes or companies that only use them for the purposes of setting up a payment plan for your premiums.
Another way to obtain help in locating companies that do not factor in credit scores for insurance rating purposes is to contact your state department of insurance. They should be able to tell you which companies do not use such criteria. If you have bad credit, this is important information to have in order to get the best price possible for your auto insurance needs.
Alternatively if you have poor credit, you can shop around for as many car insurance quotes as possible with a third party quote tool like the one above. Be sure to compare the details of the quotes you are being given to be sure that you are comparing the same coverage. If one insurer is significantly lower than other companies for the same coverage or better, you can feel confident that the company does not factor in credit history.
Making the Best of Credit Score Usage by Insurers
You need to know what your credit scores are and what is on your credit report. The best way to do that is by ordering a free annual copy of your credit report. By visiting the Federal Trade Commission website, you can find out exactly how to do this by mail, phone or online. You will be able to get your credit report from the 3 major credit reporting bureaus: Equifax, Experian and TransUnion.
Be sure to thoroughly review your report, looking for inaccuracies and errors. If you find any, you will then need to dispute the error, so that it can be corrected or removed. In this way you can improve your credit score as much as possible so that you can get the best car insurance rates.
You may also find that you have a poor credit score that is due to identity theft. If this is the case, you must report it and take the appropriate steps to repair your credit. You can find information about how to do this on the United States Department of Justice website.
There is also the case of bad credit for which you are genuinely responsible. If this is your situation, learn all you can about how to improve your score, so that by taking the right action, you can improve your score so that your insurance premiums will be less impacted by it in the future.
When you have taken care of making sure your credit score is as good as it can be, you are ready to start shopping around. Be sure to check out a variety of different insurers and compare prices to make sure you get the best deal possible on your car insurance needs. Get started with a car insurance quote comparison now!