Your Perfect Driving Record vs. Your Late Mortgage Payment
Today, many companies providing auto insurance in Florida and elsewhere are increasing the rates of existing customers and charging higher rates for new customers based on a poor credit score. Even if you have a perfect driving record with no history of traffic violations or accidents, you may end up paying a higher premium because you were late on a mortgage payment. Sure, paying bills late should adversely affect your credit score, but your auto insurance premiums? In fact, in increasing numbers auto insurance companies are using your credit score as the primary way to determine premiums.
Fair vs. Realistic
Is this policy fair? It doesn’t really seem fair to most people. Even the regulatory agencies governing insurance practices aren’t sure that there is a clear correlation between credit scores and insurance risks. However, most companies providing auto insurance in Florida will be quick to point out that there is a strong tie between managing money responsibly and responsibility on the road.
What can you do?
First, be aware of your credit score and work to improve it.
Check with your insurance agent about the possibility of other ways to improve your rates.
When looking for an insurance company, ask which factors will be used to determine your rates.
When it comes right down to it, improving your credit score will help you in many ways. In today’s struggling economy, every effort you can make to reduce your debts and improve your credit will pay off in a huge way.