Why do car insurance companies check your credit score?

Not every car insurance company will check your credit score. But why some car insurance companies check your credit score is to reduce the level of risk drivers with low credit scores present to the company. Studies show that drivers with bad credit are more likely to get into an accident and file more expensive car insurance claims. If you’re worried about your credit score, enter your ZIP code below to start comparing free insurance quotes and find cheap coverage.

Compare Cheap Car Insurance Quotes

 Secured with SHA-256 Encryption

Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently a professional writer.

Full Bio →

Written by

Brad Larson has been in the insurance industry for more than a dozen years. He started out as a claims adjuster for a national carrier. He has since switched to the agency side of the business. Brad is licensed in all P&C lines.

Full Bio →

Reviewed by Brad Larsen
Licensed Auto Insurance Agent

UPDATED: Oct 24, 2020

Advertiser Disclosure

It’s all about you. We want to help you make the right cheap car insurance coverage choices.

Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single company.

Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare cheap car insurance quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about car insurance. Our goal is to be an objective, third-party resource for everything car insurance-related. We update our site regularly, and all content is reviewed by car insurance experts.

In a nutshell...

  • Some reports estimated that over 30 percent of all credit reports have errors
  • Outside agencies proved that consumers with low credit scores have a higher chance of filing a future claim
  • There are other variables which may provide many discounts where your final car insurance premiums

Car insurance companies commission thousands of studies per year to measure risk across a long list of variables.

In fact, actuary jobs are some of the highest paying jobs for students majoring in math fresh out college.

An average salary for an actuary can hit $100,000 in some states, and over 75 percent of all actuary jobs are in the insurance industry.

Enter your zip code above to get FREE car insurance quotes today!

What is a credit score?

Nothing specifically about your driving skills or how you can swerve faster than a speeding bullet but the odds of you filing a future claim.

Studies commissioned by both car insurance companies and outside agencies prove that consumers with low credit scores have a higher chance of filing a future claim and logically this makes a little sense.

When the going is good, and you have sufficient confidence, then you may not file a small claim to avoid risking higher future auto insurance rates with an application on your record.

Again, it’s not a personal definition of you as an individual but the result of risk studies for groups of people with bad credit.

Compare Cheap Car Insurance Quotes

Compare quotes from the top car insurance companies and save

 Secured with SHA-256 Encryption

Compare quotes from the top car insurance companies and save

 Secured with SHA-256 Encryption

How much will a poor credit score cost me?

There is no black and white answer for this as some car insurance companies pay less attention to credit scores than others.

Then there are other variables which may provide many discounts where your final car insurance premiums will not seem affected at all.

Some reports estimated that over 30 percent of all credit reports have errors so before you start car insurance comparison search try to pull a copy of your credit report and credit score and dispute any information you believe to be incorrect.

Instead of comparing only a couple of companies try to compare at least a half dozen or more and maybe even look for companies who do not pull your credit.

Enter your zip code below to get FREE car insurance quotes today!

References:

  1. https://www.thebalance.com/filing-auto-insurance-claim-2645925
  2. https://www.allstate.com/tools-and-resources/car-insurance/how-to-compare-car-insurance-rates.aspx
  3. https://www.allstate.com/tools-and-resources/car-insurance/tips-for-car-insurance-discounts.aspx
  4. https://www.allstate.com/tools-and-resources/car-insurance/ask-agent-premium-deductible-limit.aspx

Compare Cheap Car Insurance Quotes

Compare quotes from the top car insurance companies and save

 Secured with SHA-256 Encryption