Negative Credit Affects Auto Insurance Rates

Credit Checks for Auto Insurance?

You read that right—if you want to get the lowest auto insurance rates, you need to find a credit repair service to help you repair your credit. As odd as it may sound, auto insurance companies run credit checks on you now, on the theory that if you have less than stellar credit, you will be a more than average insurance risk. Meaning: they think that if you don't take care of your credit, you will not be a careful driver. This may be an unfair assessment, but that is their policy.

Is That Fair?

Unfortunately, it is completely legal to check your credit history while going over your application for auto insurance. While they look over your age, driving record, and health history, they can also look over your credit history. One of the reasons behind this is that if your credit history is bad, you will be more likely to file a claim. Some sources say that they can look up your credit history without your permission, while other sources say that you must sign an authorization form. Which is correct? Well unfortunately, both are right due to the Federal Fair Credit Reporting Act that states that they may, "…adopt reasonable procedures for meeting the needs for commerce, personal, insurance, and other information…" http://www.ftc.gov. So, either way, know that your credit history will affect how much you will end up paying for auto insurance premiums, even though all other factors, such as your driving history, are up to par. What do you need to do to get a better rate then? ... click here to read the rest of the article titled "Negative Credit Affects Auto Insurance Rates"