Want Lower Rates? Check Your Credit.

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We all want to save money on our car insurance, but how do we do that? Sometimes the answer isn’t calling a phone number you heard on TV from a talking gecko. There are many ways to lower your rates through your existing coverage. One highly overlooked way to lower insurance premiums is by keeping your credit in check.

Many people incorrectly believe that their credit score has no effect on their insurance premium. In fact, insurance companies use your credit score but in different ways than usual. Your credit score contains a lot of information, including how long you have had credit, how many lines of credit you have, and how often you pay bills on time. Insurance companies are not interested in every detail that your credit score has to offer, so they have created their own score system: the insurance score. Your insurance score contains your credit score as well as other factors, like driving history, to determine your risk level. For example, if you have a poor credit score and an extensive history of accidents and violations, chances are that your insurance premium will be extremely high. Using information from your credit score does not only help the insurance companies, it helps you as well. And don’t worry about the check having an impact on your score, unlike a financial inquiry, the insurance check is more of an informational inquiry and won’t have a negative impact on your overall score like credit card checks, etc.  If a company can see that you are a lower risk, your premium will be lower than those with a higher risk. While accidents can happen on the roads and be outside of our control, one aspect of your insurance score that can be controlled is your credit score. The higher your credit score, the more favorable you look to insurance companies. The more favorable you look to insurance companies, the lower your premium will be.

If you have any questions about how your credit score affects your insurance premium feel free to  call us or email us. Don’t forget to check our Facebook page.

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