What car insurance companies don’t use credit ratings?

Credit Score & Car InsuranceWhat car insurance companies out there do not use credit ratings when determining who will get approved for a car insurance policy (and have cheap car insurance rates)? Why do credit scores and credit ratings even matter when it comes to purchasing auto insurance coverage? How can you find cheap car insurance even with bad credit? Read on to learn as much as you can about credit ratings and car insurance and then be sure to enter your zip in on the side of this page to compare free auto insurance quotes from top companies online!

Responsibility is an important factor in determining what you will pay for car insurance. A clean driving record goes a long way in showing insurance companies that you are less of a risk to them. A solid credit rating also shows that you are less likely to take dangerous chances in your car.

People who make payments responsibly are statistically more likely to drive responsibly. There’s even an industry name for the equation: the “financial responsibility score.” You may be able to save more than 50% with a good credit rating. But what are the options for those who do not have such a sterling credit rating? If you know what car insurance companies don’t use credit ratings, this can be a good place to start.

Understanding Your Credit Rating

Your credit score is measured by independent organizations called credit bureaus. They take into account factors such as your payment history, how much you owe, the amount of credit available to you, and the length of time you have owed money. A good credit score means you can be counted on to pay your debt and pay it fully. It signifies your membership among the ranks of reliable and responsible citizens.

“Good” credit ratings are represented by a score of 700+, while scores below 600 are considered “poor.” They are usually determined by one of the three big credit reporting agencies: Equifax, Experian, or TransUnion. Every US citizen is eligible for a free credit report once per year from AnnualCreditReport.com.

While credit ratings primarily revolve around credit, as the name indicates, the trend lately has been to apply the rating to more diverse array of situations. Landlords look at your credit to determine if you can be trusted to pay rent each month. Employers look at it to see if you are reliable. And, now, insurance companies look at it to determine the level of risk you pose to them.

Use Caution with No Credit Check Car Insurance Companies

Find car insurance companies that don’t use credit ratings, but be careful in doing so! An Internet search for “no credit check car insurance” should provide you with many options for insurance providers who do not use credit ratings as a factor in determining premiums but many times the no credit check car insurance rates are much higher than regular auto insurance rates so make sure to shop around and do your homework before making a purchas. A visit to the Web site of the insurance regulatory commission in any given state, or a call made to the commission’s toll-free number, will also provide a wealth of information about no credit check car insurance providers in your state.

The caveat is this: the phrase “no credit check auto insurance,” as well as any of its derivations, most often accompanies higher premiums. The companies using the no credit check tag line on their marketing campaigns are targeting riskier audiences, and often more desperate ones. Those with poor credit ratings may fear that they won’t be able to get car insurance at all, or that they will have to pay exorbitant rates.

Finding a provider that will cover them at anything resembling a reasonable premium may seem like a gift. But the fact is that you need to do careful research that takes into account as many rates as possible. Using an on-line car insurance quote comparison tool is a great way to see what options are out there.

How to Protect Yourself and Your Credit Rating

If you are denied car insurance or given a higher premium because of your credit rating, your insurance provider must give you the contact information for the credit reporting agency that delivered your score. It is a good idea to get in touch with the reporting agency to find out the details of your report. If you request the information within 60 days of being denied insurance, you are eligible for a free copy of your report. Once you have all the information at your disposal, you will be able to analyze the results so that you can determine what steps to take in order to improve your credit rating and thus lower your insurance premiums.

Compare No Credit Check Car Insurance Quotes Online

Compare both “no credit check” car insurance quotes and traditional car insurance quotes using online tools that provide a wide array of competitive rates. Even if you have poor or non-existent credit, it is very possible that the best rate may, in fact, come from a provider that checks credit ratings. You never know until you compare quotes. Enter your zip code in on the side of this page to start comparing car insurance quotes online today!

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