Your car insurance rates will be affected by your credit history
by: RobertBain |
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You should be ready to pay more for car insurance if you have poor credit. This has become highly debated issue out there right now. Too many people are required to have such insurance to drive their vehicle legally. Yet it is very hard to cover the high premiums if you haven't established credit. For those that have very poor credit for reason or another, it is just another brick wall standing in the way of financial freedom.
It is understandable why so many factors will affect the rates you pay for your car insurance. Yet it is a mystery to me and to many others why it has to tie in with a person's credit. In many ways it just doesn't seem to be fair or to really make sense. Some people haven't had the chance to establish their credit yet but have to pay high premiums for car insurance.
I discovered this myself a couple of months ago, and I was very surprised. I have never had a speeding ticket. I will tell you though that I have been pulled over many times for speeding and should have gotten more than just a warning. I have had the same car insurance company for years. A few months ago I opened the bill and found out that the cost had increased by about $30.
To my dismay it wasn't a simple mistake but a complicated issue. I did know my credit wasn't great due to my son having an illness last year. The mountain of medical bills is there and we have suffered in some areas due to it. Still, I have always paid my car insurance on time. It is mandatory to have where I live. I also have never had a ticket or been involved in an accident.
I made an honest effort to get quotes on car insurance from other agencies. Yet all of them asked me if I would consent to a credit check. I gathered from this that things have simply changed in regards to the criteria for establishing rates for car insurance. I decided to stay with the agent I had because they offered the lowest rates compared to what I was getting with my quote efforts.
What I did discover was that 90% of all car insurance companies now calculate your credit rating into your risk assessment score. Is it fair, I don't think so. Is it legal? Unfortunately it definitely is. This is likely just another ploy for insurance companies to continue making more money.
This is just one more reminder though to people of all ages that your credit is something you really have to take care of. While there are unforeseen circumstances you will have to deal with, many issues with personal credit can be avoided. You don't want to constantly have additional fees with your bills due to a poor credit rating.
I feel sorry for those that are just starting out too. How can you possibly make enough money to cover your expenses like that? I think in the end it is just going to result in more people not having the insurance coverage that they need. This includes both those that liver where it is mandated and those that live where it is an option.
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About the Author
Robert Bain is fascinated by the secret credit industry. He follows personal credit related issues such as credit cards, debt relief, equity loans, debt relief services and scams bad credit cards offers. Don't reprint the same version as everyone else.
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