Auto Insurance and Credit Score

Did you know that getting an auto insurance quote can affect your credit score?  Every time you get a different quote, it marks as a hit on your credit.  Too many of these hits can actually lower your score.  That's why when you're shopping for auto insurance it makes sense to to hit your credit ranking just once.  Beyond Quotes enables you to do this by providing you with the absolute lowest prices from up to 15 auto insurance companies.  These companies are:

• Progressive
• Esurance
• AIG Auto
• GMAC
• Safeco
• Encompass (Subsidiary of Allstate)
• Travelers
• Unitrin Direct
• Permanent General
• Liberty Mutual
• MetLife
• The Hartford
• Electric
• Arrowhead

Auto insurance companies base their rates on many different factors, and credit scrore is one of them.  This is one of the reasons that they generally request a Social Security number.  You do not have to submit this if you don't want to, but without doing so, it is difficult to get accurate quotes.  To keep your credit in good standing, get your auto insurance quotes from Beyond Quotes!

Auto Insurance and Credit Score (cont.)

In Novermber of 2006, Oregon voters defeated ameasure that would have made it unlawful for insurance companies to use a person't credit score as a relevant risk factor for determining rates.  Though there is no law in any state which prevents insurers from using consumer credit information, 26 states have passed "model law" legislation that requires insurance companies in at least notifying that credit history is a considered factor when determining rates.  These model laws generally have two other distinguishing characteristics:

• The encourage insurers to take into account a "extraordinary life events", like catastrophic illness, or loss of a spouse, and
• Credit score cannot be the sole determining factor when denying insurance coverage.

The system is not perfect, of course, and consumer groups argue that the current system is especially unfair to people who have poor credit because of job loss, divorce, identity theft, serious illness, or inaccurate credit reports.

Still, insurers maintain that credit history is indeed a reliable predictor of risk and note that while people may be able to get tickets taken off their records, it is much more difficult to manipulate one's credit score.

Consumers should be aware that their credit histories are probably affecting their home and auto insurance rates in some way.  This is why it is important to periodically review your credit history to make sure it is accurate.  If it is not, when you take steps to correct it, you may find yourself paying less for both auto and home insurance. 

It is also important to shop around for auto and home insurance since different insurance companies weigh credit histories differently.  Some insurers, for example, might only be interested in major credit events such as bankruptcy or foreclosure.  If you happen to have excellent credit, you might want to find the company which weighs this heavily when setting rates.

Obtaining your credit report is rather a simple matter.  You are entitled to one free report per year from all three credit reporting agencies -- Transunion, Equifax, and Experian.  You may obtain this report by either calling 1-877-322-8228, or by going online to Annual Credit Report.  If you believe your credit report contains erroneous information, you are entitled to file a dispute, and the credit agency in question is required by law to investigate. 

Be very cautious about anyone offering to "fix" your credit for you.  For more information about credit repair, and ways to avoid being scammed you may want to visit Ftc.gov.