How Does Credit Score Influence Insurance Costs?
The credit score is one of the factors that determine your monthly premium. It matters to the insurance company how good you are at handling your finances. However, not to worry too much if your mistake was committed over 5 years ago – and it was never repeated again since.
This may bring down your premium even if your credit score is far from ideal but it would depend on the assessment of the insurance company. It is a highly debatable topic.
That being said, over 90% of insurance companies are using the credit score to affect and explain higher insurance rates It can even be the reason for rejecting an application for car insurance.
Currently about 40% of U.S. drivers are considered moderate to high risk drivers based on their credit scores. This means these people are likely to be charge anywhere from 20 to 50% higher than a person who has a good credit score.