Can late credit card payments affect auto insurance rates?

Woman driving an automobileThere are a number of reasons that can raise a consumer’s car insurance rates. Speeding tickets, age, and even where someone lives. But can a consumer’s credit report affect their auto insurance cost?

There’s a debate among insurance companies, legislators, insurance regulars, and scholars about whether a person’s credit report is indicative of their driving skills, according to Bankrate.com. Some believe a poor or even average credit report means that a driver is high-risk, even though they’re not quite sure how. Insurers do use these to decide whether or not to issue a driver insurance and how much their premium will be.

A consumer with excellent credit is much more likely to receive cheaper insurance rates, Bankrate.com said. Those with poor credit will pay 20 percent to 50 percent more on their premiums.

It’s even possible for a consumer with a less-than-average driving record but a good credit score to receive better auto insurance rates than one with an excellent driving record and a so-so credit report, Bankrate.com said.

Consumers are entitled to a free yearly credit report and are better off getting them from one of three-government approved agencies – Equifax, Experian, and TransUnion. Other companies offering free credit “scores” may charge for their services.ADNFCR-3298-ID-19735020-ADNFCR

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

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