Credit Card Relief

 

Everyone understands that credit scores affect how much you pay when it comes to interest rates on credit cards, home loans and other lines of credit. But did you know your credit score also impacts how much you pay to get behind the wheel?

Most consumers don’t realize their credit score is a big factor when it comes to car insurance premiums. According to estimates from an insurance research firm, 92 percent of insurance companies use credit information when underwriting new policies.

Insurance companies use variables like: outstanding debt, length of credit history, late payments, new applications for credit, types of credit used, payment patterns, available credit, public records, and past-due amounts.

The insurance companies argue that there’s a strong correlation between a consumer's financial history and his/her future insurance loss potential. They claim someone with a credit score of 750 or above is less likely to file an insurance claim.

Your credit score doesn’t just influence your rate, it’s actually a major driver of car insurance prices. It’s just one more reason to try and establish a good credit history.

CarInsurance.com estimates that drivers with credit scores above 750 save an average of $783 a year on car insurance. But it’s not just bad credit that drives rates up. Drivers with little or no credit history wind up paying even more.

Average premium for drivers age 16 to 24 — $3,152

- Credit score above 750 — $2,515

- Credit score of 650 to 749 — $2,387

- Credit score of 500 to 649 — $2,692

- No credit file — $4,191

Average premium for drivers age 25 to 34 — $1,938

- Credit score above 750 — $1,155

- Credit score of 650 to 749 — $1,658

- Credit score of 500 to 649 — $2,023

- No credit file — $2,182

        * Estimates according to CarInsurance.com

There are a handful of no credit check insurance companies out there, but if you use one, expect to pay slightly higher premiums. It’s important to figure out if the higher rate is still less expensive than what you’d get charged for having poor credit.

Contact CCRNow for more tips on managing your debt and repairing bad credit. Click here to learn more about eliminating debt without bankruptcy, or call 1.866.345.3077 to get advice from a trained credit relief specialist right now.

 

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