How to Lower Your Car Insurance Premiums by Improving Your Credit Score

A Simple Guide to Understanding Your Credit-Based Insurance Score It might seem strange that your credit score has anything to do with your car insurance rates. After all, you’re not taking out a loan to buy the policy. But for most drivers, in most states, your credit history is a major factor in determining what you'll pay for your car insurance. The reason is simple: Data. Insurers have found a strong statistical link between a person’s credit history and their likelihood of filing an insurance claim. A driver with poor credit is, on average, more likely to file a claim than a driver with excellent credit, even with a clean driving record. To a car insurance company, this means a higher risk, which translates to a higher premium. Let's dive deeper into this relationship, and what it means for you. Credit-Based Insurance Scores vs. Your FICO Score First, it's important to clarify that car insurance companies don't use your standard credit score, like a FICO or Vant...