Improve Your Credit Rating to save on Car Insurance
September 13, 2015 Comments Off on Improve Your Credit Rating to save on Car Insurance 79 Views
Premium for your car insurance policy depends on various factors. You can have greatly reduced auto insurance if you happen to have a good credit score. If the driver has a bad driving record then it is very likely that his car insurance comes at a much higher cost than the driver who has a clean record.
It is very well understood that a person who has bad credit should have filed many insurance claims. Such a person is likely to have had too many accidents in the past and prone to more in the future. That is why insurance companies put great stress on the rating when determining the amount of car insurance. This saves them from the losses they suffered in the future accidents by a reckless driver.
The other side of the coin is the person who has good credit rating. This is the person who has made no progress in the past and has a very good driving record. It reflects the mental stability of the driver and also instills confidence that he will probably not suffer much from an accident in the near future. Therefore, a good rating reduces the amount of insurance dramatically.
A driver with bad credit rating shows a bad record of driving. The record of such a driver will have tickets, fines relating to offenses such as speeding, parking or rash driving. Bad credit rating can also cause due to DUI offense. Bad credit rating increases the amount of car insurance significantly.
It is not uncommon for past insurance performances of a driver to affect its current credit score. If the person has not taken insurance for a long time or sometimes on the beaten then this leaves the financial problems of the person. This fact lowers the credit rating of the person and is probably paying too much for auto insurance.
Expect someone with excellent credit scores of 700-750 can save at least $ 750 per year. This is not peanuts by any stretch of the imagination. This amount is not small. This amount when added for a long period of time is enough to buy a new car. A good rating indicates two things very clearly that a person is financially secure and stable driver is.
All that a low credit score does not mean that the individual certainly been involved in a car accident, insurance companies consider it a strong criterion in determining the cost of insurance premiums. Insurance companies believe that a good rating means a low risk company.
Rating System adopted by the auto insurance companies is simple. This system gives meaning to the risk to give his credit with the driver in place of prominence. Generally, a score of 650 is considered as a safe bet by auto insurance companies while created with a score of lower to pay higher insurance premiums. Credit rating provides good guidance for companies in determining the proper auto insurance amount.