Auto Premiums Increased due to High Credit Score

Reader’s Question about Texas Cheapest Auto Insurance: wants to know why their insurance premiums increased due to bad credit.

Question: My auto insurance premiums increased due to bad credit. What does my credit score have to do with my auto insurance and what can I do about it? Thank you, Lester B

Answer: Yes Lester, auto insurance companies consider your credit score when deciding whether to sell you a policy and at what cost. Statistically people with poor credit are viewed as having negligent habits that can equate to other areas of their life. A company cannot refuse to sell you a policy or cancel or not renew your policy solely based on your credit. You have felt the sting of your company taking advantage of this statistic and increasing your insurance premiums.

Lester, if you are over 24 years old, you have a good driving record, and drive your car mainly for pleasure, inquire with some other insurance companies as requirement vary from one to the next. If you find a cheaper price, you are allowed to cancel with your existing company and they have to pro-rate the premiums on a month to month basis.

There are three companies that issue Credit Reports, Equifax Information Service, Experian, and TransUnion Corporation. Contact these to identify the vendor reporting poor credit and try to clear any false information. Many times vendors will oblige you by removing bad credit. Improving your credit score will serve you well in many areas of your financial activities, therefore you want to treat it as an emergency and act rapidly.

Category: Reader Questions