Credit score and auto insurance quotes

These days the importance of credit score is highlighted even more. While providing auto insurance quotes credit rating is one of the key factors in determining applicants’ risk profile. Everyone seems to be interested in your credit worthiness. Mortgage companies, landlords, employers and insurers regularly check credit history of their applicants. 

According to many auto insurance companies motorists with better credit ratings are less likely to make a claim. Although there are still few insurers that do not check credit history, most do ask for insurance credit score. Their calculation is not necessarily the same as standard credit check. Therefore, someone with perfect creditworthiness might receive a low insurance rating. 

Currently it is almost an undisputed fact that credit habits tell a lot about applicants’ likelihood of making a claim. Insurance providers would naturally use every tool available to predict the profitability of your custom. Several studies have proved a direct link between claims and credit. 

Some people might see that an insurance company enquired about their credit rating. They might assume that is the reason for the drop in their rating. This assumption would not be true as this would be considered a soft pull and would not affect your score. Nearly all of the credit checks that are not related to a credit application are considered soft pull. 

When you apply for a loan, credit card or mortgage you would have a hard pull on your credit history. The purpose and indications of these two credit enquiries are completely different. The soft enquiry provides valuable information about your credit habits not necessarily needs. But hard pull offers insight to current need of credit.

In conclusion, there is not really much you could do about it. If you want a decent savings on your car insurance you need to compare different quotes. When you do that they will go ahead and check your insurance rating. Simply you could tell them to knock themselves out. It is unlikely that it will hurt you in anyway.

Credit scrore is an important factor for you to get low auto insurance and hence learn to maintain your credit score. We will follow up on steps for credit score.


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