How Your Credit Score Affects Your Virginia Auto Insurance?

Reader’s Question:

I heard that credit score can affect a person’s auto insurance premiums. If that’s the case, how can my credit score affect my Virginia auto insurance rates? If let’s say I have a not-so-good credit score will this impact my insurance rates negatively?

Noel

Richmond, VA

That’s true for both of your questions Noel.

First, it’s true that credit score can affect your Virginia auto insurance rates. And second, it’s also true that a not-so-good credit score would affect your insurance rates in a negative way. That would be in a manner that you get higher auto insurance rates for that.

So what would be the reason for that? In general, insurance companies believe that a person’s credit score is related to his or her chances of filing for insurance claims. It’s been established by studies that a person with good credit score made fewer insurance claims as opposed to a person with a low credit score.

Remember Noel that even without your permission auto insurance companies can take a look at your credit history because that is allowed by the federal law. So it’s important for you to make sure that your credit history is correct.

Now if you have a low credit score, then you can start doing something now to improve your credit score. Let me just remind you there also other factors that insurance companies use when setting your Virginia auto insurance rates like your driving records, type of vehicle driven, vehicle usage, location, etc. so you don’t have to lose hope that you insurance rates will be that expensive just because you have a low credit score.

For more information about auto insurance in your area, you can also check with your insurance agent.