Your personal credit will affect your price of car insurance | Personal Finance

By RobertBain
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How are your car insurance rates fairing due to your credit history? For some people it isn't an issue but for others it is going to be one more area where they feel the financial pinch due to their low credit scores. Yet it is often a catch 22 for many people because the law will catch up with them if they drop their car insurance coverage. In many areas it just isn't an option to be without it.

There are plenty of variables that have to be taken into consideration for a quote for car insurance. They want to know your age, marital status, your driving record, the type of vehicles, and how all will be driving them. Now you need to be prepared to give your consent for a credit check as well. If you already have vehicle insurance the law gives that agency the right to run one without contacting you first.

I can definitely relate to those that have found themselves involved in this issue. I have always worked hard and paid my bills on time. I also have a very clean driving record and I live where having car insurance is mandatory. Yet I just got an increase in my car insurance rates of about $30 a month due to unfavorable issues on my credit report.

This means I will be paying more than $300 this year more than before for the same coverage. I can tell you I am definitely not happy with this. I didn't take the news well and tried to take action. Yet I found there really wasn't anything for me to do but to write that check for the extra amount and try not to let it eat away at me.

I made an honest effort to get quotes on car insurance from other agencies. Yet all of them asked me if I would consent to a credit check. I gathered from this that things have simply changed in regards to the criteria for establishing rates for car insurance. I decided to stay with the agent I had because they offered the lowest rates compared to what I was getting with my quote efforts.

The more agencies I contacted the more apparent it became to me that I was stuck. Almost all of the car insurance companies out there were now exercising their legal right to use a person's credit rating to determine their insurance rates. Of course they give you the story that statistics show those that are irresponsible enough to have bad credit often end up filing claims with their provider. I just think they are out to make more money than they already do.

They have found evidence that there is a direct link between those that drive safely and those that pay their bills on time. They feel responsibility in both of these areas will often go hand and hand. Yet there are plenty of people out there, myself included, that feel like they are getting taken advantage of with increased car insurance premiums.

For young individuals though, it is vital that they know this information. The cost of car insurance when you are young is unbelievable as it is. You don't want to have to pay a dime more than you should have to for it. You also can't afford not to have it. Even if the car insurance laws aren't mandatory in your area, you still need to make it something you have. You just never know when you will need it.

About the Author

Robert Bain is fascinated by the secret credit industry. He follows personal credit related issues such as credit cards, debt relief, car loans, debt relief services and scams bad credit cards offers. Don't reprint the same version as everyone else.

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