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Marion Said:

AUTO INSURANCE AND CREDIT REPORTS, What does one have to do with the other?

We Answered:

You are correct, many insurance companies are indeed checking credit reports and refusing people, or charging more for those whose credit isn't good.

Personally, I think this practice should be outlawed. I don't believe that bad credit makes someone more likely to file a claim, or a fraudulent claim. This was the claim the industry used to get permission to do that.

It's also become a common practice to run a credit check for a job too!

So..you get a little behind on your bills and what happens? First your interest rates rise, then your car insurance goes up, then you can't get a better job.

How the heck are you supposed to get out of the hole if they keep piling dirt on the sides so the hole gets deeper!

Good news may be on the front - There is already a lawsuit in CA challenging the credit issue as discriminatory towards minorities who are more likely to have poor scores. State Farm has already stopped checking credit in that state. If we can see more suits filed, maybe this issue will go away.

Grrr.....
you've touched on a pet peeve!

Oh..and you don't really have to give everyone your social security number. Only businesses that are tax related, like your employer, your bank and investment companies. Technically you can refuse to give it to anyone else, including credit card companies and lenders, but they then have the right to refuse to do business with you. Again..maybe if more people resist, change will happen.

Vanessa Said:

why does your credit score affect your car insurance premiums?

We Answered:

No, it doesn't affect your driving skills but people with bad credit scores tend to have more claims and worse claims. There have been YEARS of research on the subject & that is what the statistics show. Insurance is all about statistics. I can see why this could happen. People with bad credit tend to have less money, if they have less money, they don't have the money to do the larger things on their car to keep it safe like brakes or tires, etc until they are about ready to go. If these things are let go on a car, the more likely there could be an accident (bald tires or bad brakes may keep someone from stopping on time & cause an accident).

***Progressive ABSOLUTELY pulls credit. They were one of the very first to do so & they were the ones that basically started it all when it comes to credit. Everyone followed their lead. They started pulling credit over 9 years ago. When you get a quote with them you don't "see" anything that tells you they did this. It is all "behind the scenes".

Juanita Said:

Why did my car insurance go down?

We Answered:

It could be a number of reasons, insurance is based on a point system (not to be confused with points on a license). You are scored based on age, marital status, how long you've been with the insurance company, credit score, driving record, etc. Also the type of car will go into the score. So it could be several factors. Your policy paperwork will probably tell you your score, also sometimes refered to as an insurance tier. You can compare last year's and this years. The re-tiering happens at the renewal or when a car on the policy is changed. If you are mid policy and haven't made changes, the difference may be because you are no longer being charged a fee of some kind.

Sue Said:

Why are car insurance companies using credit histories to price premiums.?

We Answered:

Because there is a correlation between credit and claims frequency.

Folks with low credit scores are more likely to file claims. Your premium is based on the risk incurred by the insurance company when they insure you. The bigger the risk....the higher the premium.

Insurance companies may not make loans.....but they are a financial product. Your credit score is only one of many factors they use to determine your premium.


If you have a good credit score, you are rewarded with a better rate.

So, work on cleaning up your credit and improving your credit score and eventually your premium will go down.

Marvin Said:

Which car insurance companies do not use credit history to determine their rates?

We Answered:

As far as i know they all do that now.
I am not aware of any that have not picked up that practice.

Frances Said:

Should I put my car insurance on my credit card?

We Answered:

Dude, forget your math. It is VERY SIMPLE.

Paying interests is MORE EXPENSIVE than paying NO INTERESTS.

That's it, no need to know how to count either.

If you cannot make the whole payment then SAVE UP till you can.


Until then, GET THE BUS.

Actually, stick to the bus until you paid up your debt IN FULL. AND you got the money for your insurance.

If you do not do this you'll be LIVING BEYOND YOUR MEANS which means you will only dig yourself deeper in the S*** much like the rest of those m-o-r-o-n-s out there looking for loans over loans and consolidation and all that bad stuff that BRINGS YOU NO GOOD.
Just GET THE BUS or WALK.
lol.