Bad Credit Car Insurance

bad credit car insurance
Many drivers are unaware of just how important their credit score is to their insurance rates. In the last decade, insurers have placed even more emphasis on credit ratings, as a predictor of risk. Unfortunately for the safe drivers out there who do not have moving violations nor accidents, having bad credit can increase their rates significantly. Some excellent drivers that have been accident-free with credit issues, actually pay more for coverage than others who have had accidents, but maintain good credit. While this trend seems unfair, it is likely to continue.

After the great recession of 2008 and 2009 more and more people had their credit affected as a result of failed businesses or home foreclosures. People who had always been responsible with their credit were unexpectedly slammed with debt and loans they could not pay back, this left good, hard-working people needing bad credit car insurance coverage. Check out some ways to get back on track and save on auto insurance at the same time.

Improve your Credit Score and Save on Auto Insurance

To get cheaper car insurance, you don’t need an 800 credit rating. Most automobile insurers will consider a good score around 650 or higher. Other carriers are more lenient and will give lower rates to those that have a 600 or above median score. This should be encouraging to those that have lower scores, because a number in the 600s should be achievable to most, with some credit repair work. If you are below this level, follow these simple steps below and watch your score soar.

1. Get a detailed credit report.
Go over your report and look for any false information that may be dragging down your rating. If there are items that are inaccurate, then write a detailed explanation to the reporting agency and get all the items removed. Once removed, your score will move higher.

2. Pay your bills on time.
Each time you pay a major bill like a credit card or car payment late, it is reported. When you have a track record of paying bills late, your credit takes a big hit. Get your credit up by simply paying your bills on time or early.

3. Pay off your outstanding debts.
The average American has over $7,000 in credit card debt. Lower your outstanding debts as fast as possible and watch your rating improve. If you’ve got small debts from a past cable company or cellular provider, get them paid off quickly. Once you do, your credit will improve and you will be paying less for car insurance.

Apply for multiple policies with the same company and get lower rates.

If your credit is not so great, and you have more than one insurance policy, then get a bundled package and save. Let’s say you have home insurance coverage with a company that is cheap, but due to your credit, your automobile premiums are higher than you’d like with another insurer. Get a bundled rate quote that combines both auto and home and you could save up to 20%. Home insurance rates are not as dependent on a person’s credit, so if you bundle homeowners and automobile together, you should be able to save a lot.

If you do have, Poor Credit makes sure you get Auto Insurance Discounts.

Just because you currently have poor credit doesn’t mean you can’t qualify for auto insurance discounts. Most of the major carriers have special rates for teachers, military personnel, veterans and good students. If your credit is poor, you can still qualify for these special rates. There are even some insurers who specialize in offering cheap policies to retired people. Apply for an online insurance quote today and get your rates lowered.

Set your Deductibles Higher and Save.
A simple way to lower your auto premiums is to set your deductibles as high as you can. This means putting your deductible at $1,000 or more. The more you pay, the lower of a risk you are to insurers and they in turn give you big price breaks. This will bring down your costs by 10% or more but remember, if you file a claim, you will need to have that $1,000 available. If you get into a wreck and don’t have the necessary money to pay for the claim, then you could get your insurance cancelled.

Cancel Unneeded Coverage
Review your current policy and drop any coverage you don’t need. For example, your car may now be older and keeping collision insurance might not make financial sense. Dropping it could save you hundreds annually. Likewise, if you have rental car insurance that is now covered by your credit card, get it removed and watch your rates go down.

What Companies do not use Credit Scores?
All the major auto insurance companies now use credit as a factor in obtaining rates. There are some smaller carriers that promise not to use credit as a pricing factor. However, these smaller carriers charge so much for coverage, that it only makes sense to get bad credit car insurance through a national insurer. Some insurers like Progressive do not place as much weight on credit scores as most, but they still use it. Get your free automobile price quote online and get better coverage at lower costs.