It’s becoming common knowledge that having a good credit score will save you money on your auto insurance rates, but it’s unclear exactly how much it will save you. Based on a recent CarInsurance.com study, drivers with credit ratings over 750 save about $783 a year on their auto insurance quotes when compared with a typical driver in the same age group with average credit scores. The study used 42,809 auto insurance quotes to determine this figure and the results are surprising.
If you calculate this out over a lifetime of driving, a person with excellent credit can save approximately $22,815 on their auto insurance premiums. Credit is only one factor out of many that insurers use to calculate quotes but it’s becoming increasingly important. Auto insurance companies strongly defend their use of the score despite many consumers finding it unfair. Insurers have found a direct correlation between someone’s credit rating and the chances of them filing a claim. Regardless of the reasoning behind this connection, there is a connection and it makes sense for insurers to use this information.
The good news is that you have control over your credit score. Even if you have filed bankruptcy or charged off some accounts, you can repair your credit through time and bill management. It’s important to keep your credit card debt down and make all of your payments on time. It may take a few years, but once your credit score has improved you can start to compare auto insurance quotes and hopefully see a difference in the rates you receive.