Oftentimes, while most people go looking for lower monthly car insurance payments, the last thing they think about is their credit report. However, consider what your credit report says about your commitment to paying your bills and your level of financial maturity.
The fact is, insurance companies are more willing to reduce your overall out of pocket costs if the risk to them is lower. In general, policy holders who have good credit reports pose less of a delinquency risk than those with poor credit.
So if you have a good credit score, you should be able to find a good deal with most insurance agencies. However, if your credit score is lower, you may need to look for specific insurers who provide discounts for those with lower credit.
What’s more, if your credit score is good, you can oftentimes up to $200 on a six-month insurance premium, sometimes even more. If you have a credit score even higher than good, you can potentially save as much as $400 each six-month period.
Many insurance agencies are willing to give you a discount simply for having a good credit score. Keep in mind that a credit score and a credit report are two different things.
Your credit score is the overall three digit number assigned to your financial snapshot. That ‘snapshot’ is the credit report that lists all of your accounts in one place.
Obtain a free copy of your credit report and score from the top three credit bureaus (Experian, TransUnion, and Equifax).
Review your report to make certain there are no inaccuracies. Often there are mistakes that need to be removed, and doing so improves your overall score. If you do not wish to review your accounts but just want to know your score, most banks offer this service online or in person, for free.
A good report for insurance purposes is 680 or higher.