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  • Writer's pictureCharlotte Burr

How does credit affect auto insurance?

Updated: Aug 1, 2020

Insurance companies weigh many factors in coming up with car insurance premiums. Factors such as age/sex/marital status, geographic location, the make and model of your vehicle, how often and how far you drive, your driving records, and credit history may all influence your premium.

Your credit score, however, is not a black and white determination of how much your premium will end up costing you. Insurance agencies will often come up with their own insurance score for you based not only on how “creditworthy” you are, but how “risky” you are. Insurance companies will base their score off of your payment history including how many delinquent and late payments you have, the length of your credit history, and the type of credit you have such as loans or credit cards.

That being said, it comes as no surprise that generally the higher your credit score, the lower your insurance premium. The difference between having a poor credit score and an excellent credit score can be the difference between having a $5000 premium or a $2000 premium.

If you have a poor credit history, know that you have the opportunity to re-file your information with your insurance company once you have raised your score in order to receive a better rate.

Have questions? Give us a call!

AZ Insurance Team 480-535-5709

*All policies are a little different and this may not be applicable to your insurance policy, talk to your agent to see what your policy covers.*

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