Understanding How Your Credit History May Affect Your Car Insurance Coverage

Written by Jon Register

Many personal auto insurance companies consider your credit information when determining how much premium to charge for your insurance. So if you are calling around for new insurance, keep in mind that many insurers are looking at your credit history. I hope that we will be able to let you know why and how they do this.

The reason that some insurance companies use credit information is because they feel there is a direct correlation between consumer's credit history behaviors and expected claims that may occur. Therefore, they feel that people with better credit behavior are less likely to severe insurance losses.

Many insurance companies still use your age, driving history, type of vehicle, where you live in determining how much you should pay for your insurance. Therefore, if you have not established a credit history yet,repparttar companies that use credit history may not be best for you. They may not allow you to be eligible for certain discounts, which could result in higher premiums.

The companies that do use credit scoring will still use other factors in determining your premium. They will also use your age, driving history, type of vehicle, where you live in determining how much you should pay for your insurance.

Is it fair for an insurance company even look at my credit information without my permission? The answer is yes. The Federal Fair credit-reporting act says "Reasonable procedures. It isrepparttar 136898 purpose of this title to require that consumer reporting agencies adopt reasonable procedures for meetingrepparttar 136899 needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable torepparttar 136900 consumer, with regard torepparttar 136901 confidentiality, accuracy, relevancy, and proper utilization of such information in accordance withrepparttar 136902 requirements of this title." This can be found at http://www.ftc.gov/os/statutes/fcra.htm

If you feel that your credit history is better thenrepparttar 136903 insurer can find, make surerepparttar 136904 insurer has your correct name, address, social security number, and date of birth.

Some insurance companies will look directly at your actual credit reports when determining your rate, however most will use what is called an "insurance credit score." An insurance credit score is developed by using statistical techniques and methods to predictrepparttar 136905 likelihood a consumer will have a higher than anticipated losses. These are similar to what lenders use to predictrepparttar 136906 reliability of an applicant repaying a loan.

Insurance companies use many factors in determining your credit score. Here are some examples of those factors:

. Public records: bankruptcy, collections, foreclosures, liens, charge-offs, etc. . Past payment history:repparttar 136907 number and frequency of late payments andrepparttar 136908 days betweenrepparttar 136909 due date and late payment date. . Length of credit history:repparttar 136910 amount of time you have been inrepparttar 136911 credit system. . Inquiries for credit:repparttar 136912 number of times you have recently applied for new credit, including mortgage loans, utility accounts, and credit card accounts. . Number of open lines of credit:repparttar 136913 number of credit cards, whether you use them or not. . Type of credit in use: major credit cards, store credit cards, finance company loans, etc. . Unused credit: how much you owe compared to how much credit is available to you.

Car Insurance Discounts

Written by Tim Register

Trying to save money wherever you can is important to us all. Insurance should be no different. Do not assume that your agent knows everything about you and your vehicle. CarInsurance.com goes out of their way to find allrepparttar possible discounts that are available to each customer.

Drivers should take advantage of all discounts that many providers offer, that can significantly reducerepparttar 136897 cost of car insurance. Understanding discounts and how they can affect auto insurance premiums can help smart shoppers make better decisions about their coverage and possibly save themselves some money inrepparttar 136898 process.

Read below to identify possible discounts that could help you save on auto insurance this year. Other than discounts, there may be some other ways for you to save on your insurance premiums. We will go over several discounts that can help with your current situation.

First, there are discounts for Auto Safety features. Certain states will give you discounts for anti-lock breaks. Make sure you know if it is two or four wheel anti-lock break vehicle. Automatic seatbelts and airbags are frequently discounted on your insurance premiums. In most states, a defensive driver class discount may apply. Ifrepparttar 136899 principal driver usually 55 years old or older has completed an approved defensive driving class a discount could apply. Keep in mind that most states will only approve this class if it is voluntary meaning that it was notrepparttar 136900 result of a violation or infraction.

Some insurers will give you a discount for having multiple vehicles. In some cases, this will only apply if you have two or more drivers. If you have a clean driving record, meaning you do not have any tickets, accidents or suspensions inrepparttar 136901 last three years (some companies require five years) then you could be eligible for a safe driver's discount.

Many companies will reward you with staying withrepparttar 136902 same insurance company for many years without any accidents reported. They will offer you a renewal discount. It makes sense, you have carried insurance with a company for several years, and have not had an accident, your insurance company likes you and wants to reward and keep your business. Some companies honor you with a discount if you had prior limits on your previous policy. They discount you because they understand you are a better risk.

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