It’s no secret that nowadays your credit score is almost as important as your social security number, but can having a good credit score lead to cheaper car insurance? Although insurance providers like Utility Saving Expert may not willingly divulge the information on exactly how your deductibles and premiums are calculated, but it’s almost a guarantee that your current credit score is thrown in the equation.
Why you may ask? Instead of using your FICO score, insurers examine what’s referred to as an “insurance score” to determine whether or not you’ll be a potential risk for filing claims – a lower credit score, according to some experts in the industry, means that a customer with a low credit score will be a higher risk than those with higher digits. Ultimately, cheaper car insurance premiums do depend on your current credit score, and there are also different options, for example if you drive an Uber or a Taxi, you can Compare cheap car insurance with no deposit to find the perfect option for you.
Affordable Car Insurance and Good Credit Scores
The recent statistics from a study conducted by CarInsurance.com are promising for individuals with credit scores of 750 save on average $783 each year on lower car insurance. The 40% of customers with a credit score over 750 can expect to save almost $23,000 on cheaper auto insurance costs over the span of an adult lifetime.
For teen drivers between the ages of 16-24, credit scores aren’t really significant in factoring cheaper auto insurance because the majority of teens don’t yet have established credit; however consider the following statistics for teens with established credit:
• Credit scores above 750 pay an average of $2,515/yr
• Credit scores between 650-749 pay an average of $2,387/yr
• Credit scores between 500-649 pay an average of $2,692/yr
• No credit pay an average of $4,191
Young adults between the ages of 25-34 with credit scores over 750 and a clean driving record qualify for lower vehicle insurance and pay an average of $1,155 annually, compared to $1,938 to the same population with credit scores below the magical 750. Other statistics revealed the average driver between the ages of 25-34 with:
• Credit scores between 650-749 pay an average of $1,658/yr
• Credit scores between 500-649 pay an average of $2,023/yr
• No credit pays an average of $2,182/yr.
Ways to Boost Your Credit Score to Become Eligible for Cheaper Car Insurance
Even if your current credit score is less than perfect, there are ways to improve your credit to take advantage of lower vehicle insurance premiums.
• Routinely check your credit score from the 3 major credit reporting agencies
• Immediately report any errors.
• Always make payments on time.
• Never allow coverage to lapse.
• Establish credit in your name.
• Don’t hesitate to compare insurance quotes; doing so doesn’t affect your insurance score.
Remember that maintaining a good driving record as well as a credit score of 750 or above are the most effective ways to enjoy the benefits of lower auto insurance! While it may take some effort on your part to be responsible, consider cheaper car insurance premiums a well-worth investment into your future!