Could Your Credit Score Increase What You Are Paying for Car Insurance?
Could your Credit Score Increase What You Are Paying for Car Insurance?
You want to know how important your credit score? It can be the determiner as to how much you pay for car insurance. Wallethub.com just recently released a report
that shows the effect of low credit scores on car insurance premiums. This is not welcome news for those it effects.
Here is a sampling of the data:
- People with no credit pay 65% more for car insurance than people with excellent credit, on average. Drivers with no credit pay at least twice as much in PA, NJ and MI.
- Farmers Insurance seems most reliant on credit data, with credit newcomers paying over twice as much as excellent-credit customers. Even GEICO (least reliant) has a 40% penalty.
- The five major auto insurance companies use credit data in 90% of the states in which they operate, on average. Only Progressive uses credit data in all of the states it serves.
- Travelers is the most transparent about its use of credit data, providing a clear disclosure when generating quotes.
Fortunately, credit scores are higher today than they have been in a long time. It is mainly because negative items from the financial crisis have had a chance to fall off by now. For more information on improving your credit score, check out my book at www.deceptivemoney.com