Cheapest Auto Insurance

Credit has become a factor in getting the cheapest auto insurance rates because of the analysis of millions of insurance customers. The analysis showed that the average person made more insurance claims and for greater amounts if he had poor credit than if he had good credit. This has led most insurers to give their best rates to the people with the best credit.

Usually auto insurance companies use a credit score to rate your credit. The exact formula of the score varies, but the components are generally the same. It includes such things as how long you've had credit, what your bill-paying record is, what's your total debt in relation to your income and the number of accounts you have. So if you want to have credit that qualifies you for the cheapest auto insurance, you'll need to do well in these areas.

Insurance companies are required by the Fair Credit Reporting Act to tell you if they take an "adverse action" against you as a result of your credit. But there's no set definition of what an "adverse action" is or how you're to be notified. So the best way to know if your credit is keeping you from getting the cheapest auto insurance, is to ask your insurer. Your insurance company can also tell you how you might improve it, if it is having a negative effect.