There is an ongoing debate whether your credit score should have any correlation to the cost of your car insurance. The Sacramento Bee summarized an article from the Dallas Morning News about this hot topic. Negative marks on your credit report almost always mean that you will pay higher car insurance than consumers with better credit. If you’re looking for cheap car insurance, get that credit score up. A recent study shows that you could pay 35% more for car and home insurance with a poor credit report.
While insurance companies argue that credit scores help them to determine high risk customers, credit reports are far from an exact science. Recently, credit card companies have lowered the credit limits on many consumers’ accounts which lowers their credit scores. This is beyond the control of consumers and is based solely on the country’s economic crisis. Some states, including Maryland and California, have actually banned insurance companies from using credit scores to determine rates. Compare car insurance companies and the way that they determine your rates closely.
