Using Credit to Determine Rates
Car insurance providers can have access to your credit report, so they know if you make your credit card and loan payments on time. Doing so could lower your insurance rate. The more reliable you are about making your credit and debt payments, the more trust insurance providers have that you can pay their bills on time as well, so you can enjoy a less expensive premium.
Paying Bills on Time
While you don’t boost your credit rating by paying your bills on time, the opposite may have an effect. Not paying your bills on time, particularly if it is an exceedingly long period of time, could lead to the provider reporting you to a collections agency, which can damage your credit.
…when it comes to car insurance, paying your premiums has little to do with improving your credit score.
Companies in several industries, including car insurance providers, have access to credit ratings but do not provide information to the system. More often than not, insurance companies do not report payment information to credit bureaus, so on-time car insurance payments have little to no effect on building your credit score.
If you have questions about car insurance and your credit rating, call us today for the answers you need.