Anyone who has ever had bad credit knows how difficult it is to get someone to trust you with money. Banks, credit cards, and even insurers need some sort of proof that although you have had a bad experience dealing with money in the past, you can change. If you want to improve your credit, it takes dedication to develop your self discipline and time to prove your better habits since bad redit cost you with insurers. But why is it that auto insurers give drivers with bad credit a hard time? There is no borrowing of money involved, just an auto insurance policy to provide protection to the driver. Although it may be hard to realize, there is such thing as no credit check auto insurance to avoid problems.
If you think about a person who has bad credit, you can instantly name some of their bad habits that have led to their score. Most people with bad credit have gotten into their situations because of lack of responsibility, although this generalization doesn’t always apply to everyone. Perhaps you were one of those people who forgot the importance of acting responsible and consistently forgot to pay bills on time. Or maybe you’ve maxed out your credit cards and can’t pay them back. Whatever the reason your credit score is low, that low score is going to affect your ability to get car insurance.
Auto insurance companies have the ability to check a potential client’s credit score, which occurs during the application process. As you check out different insurance companies and request a quote to see how much they would charge to insure you, you give the auto insurance companies your personal information. Some of this personal information may include your social security number, which is the key for these companies to pull up a credit score.
Why would an insurer care about your credit score? Well, it’s actually pretty simple. As mentioned earlier, your credit score can reflect your perception of responsibility, or a lack of responsibility. And when an insurer can detect this lack of responsibility, they tend to believe that this attitude will spill over and affect the way you interact with other areas of life. For instance, they may predict you’ll make late payments, especially if your credit report shows you make late payments even semi-regularly. Going further, they may predict that this perceived lack of responsibility will affect the manner in which you operate a vehicle. Someone with who does not take responsibilities seriously may find themselves experiencing more traffic tickets and be involved in more accidents, and auto insurance companies look at this.
It is fair to defend yourself and state that your credit score has nothing to do with your driving capabilities. In fact, it’s actually an on-going debate with insurers and consumers. You could be an excellent driver, and your driving record could reflect such a statement. However, unfortunately for you because of your poor credit score your auto insurance company will keep a more watchful eye on you and find you to be a higher risk than a driver with a better credit score.
There is a path of redemption that you might like to venture on to get yourself out of this situation. In the economic times we’re experiencing now, most people are becoming more aware of their money and are tightening their spending. Cutting back on auto insurance is one area of life where this is being practiced. There’s a good chance an auto insurance company isn’t going to want to lower the rates of a driver with a low credit score due to the high risk you impose. There are some discounts you could look into that are offered by every auto insurance company, and see what you can do through that method.
The most obvious way to improve your chances of getting a better insurance rate with your low credit score is by fixing or improving your credit score. If your score is very low, you may want to consult with a professional on what to do, but the following suggestions could very well apply to you too. One suggestion is to pay all of your bills on time, if not early. Abstain from the use of credit cards; if you don’t have cash to purchase an item, don’t purchase it immediately, but save up for the item instead. Finally, look into getting an additional job to be able to pay off any debts at a faster pace.
There are some insurance companies out there that specialize in providing insurance for higher risk drivers. Usually this pertains to people who can’t get regular auto insurance due to the high number of traffic tickets and accidents they have on their driving record. If a more well-known auto insurance company is quoting your policy too high, you may want to see about other companies out there and find out if anyone will give you a lower quote. Also, it’s possible that some of the less-known auto insurance companies aren’t checking credit scores as a risk indicator.
Just as you should know your credit score before you go to purchase a vehicle, you should also know your credit score before you seek to buy auto insurance. Knowing your credit score before hand may save you from shock if your score is low and your auto insurance quote is high. Read through the report carefully and check for any mistakes. If there are any mistakes on your credit report, try to get them taken care of before you make any purchases. False mistakes on your credit report still count against you, and any insurance company or otherwise is going to believe the report’s findings over you claiming a mistake on the report.
The bottom line is even if you have bad credit, you should be able to find an auto insurer. Reality states that you’ll be paying a higher premium than someone with a good credit score or better, but you can work to improve your score and shop around for a better deal on auto insurance.
