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What does the state of my credit have to do with insuring my car?

J

JohnPaul

Senior member
Just curious, but I am up for the renewal of my car insurance soon, and am looking for quotes. I was asked on numerous applications how I would rate my credit. Now, my credit isn't terrible, but it's not good either, as I have ended up not paying some bills I disputed, but lost.

I was under the impression that my insurance was going to go down, because I now have not had a ticket or an at fault accident within the last three years, will turn 30 days before renewing my plan, and am clean as far as my license, criminal history, accidents, tickets etc go, but I had forgotten about this question in the application, and was just wondering what the penalty for having a bad credit history is, even though everything else is perfect. Does anyone know? I'd appreciate the info. Thanks, John-Paul
 
Huh, if they charge me more for that reason, maybe I will just prove them right. That's like charging you more for renting and not owning. It's just an excuse to charge more, I mean if you have a clean record, chances are you're not going to be scamming the insurance company. Now criminal records I would be able to understand if they tried to use the excuse that higher claims can be directly related to people with criminal records.
 
keep in minds people with bad credit pay more for credit cards too. You have to pay more because you are paying in advance just in case you do fail to make a payment.
 
Statistically it's proven that people with poor credit tend to break and lose things. This increases your risk to an insurer. (as they see it) No getting around that. You should clear your derogatory credit! It's going to be a painful road if you don't.

-DAK-
 
same reason they do credit checks for some jobs. they don't want people with horrible credit because they are more liekly to be irresponsible. If they can't manage their personal life, why would you want them representing your comapny?
 
Fortunately I have good credit so when American Family asked if they could run my credit, I said yes.

My credit premiums were lowered, if I had bad credit they'd definitely raise the premiums.
 
The thing is, I have a clean driving record for the last three years, am 30yrs old in July, have no criminal record, and have nothing bad on my credit for the last five years, so really I am being punished for something that happened more than five years ago, and also has nothing to do with car insurance. Screw statistics. my driving record speaks for itself. That is why there is so much dispute over using credit history to determine insurance rates. There is no fact in what they are saying.


Insurance companies are just looking to make more money. I just did some reading on the subject and found that there is quite a lot of backlash on this subject, with good reason. I am a perfect example, I mean I pay $1300 a year for only liability, which is the lowest and cheapest form of car insurance available, yet there are people with much worse driving records than myself, including accidents, tickets, duis etc who pay $500 yearly. Because they have good credit they pay less. How does this make sense? They should at least take into account my good driving and criminal history. I have never even had an at fault accident in my fifteen years of driving. Man, this pisses me off!!!!!

Oh, I found a few companies that don't use credit history in determining rates, so I will be going with one of them, and my insurance is only going to be $700 when I renew in July. WooHoo!!!
 
Using credit history for auto insurance purposes should be illegal. It's just one more way for the insurers to make a buck. That's all.
 
Yeah, it's bs. Other than "common sense"correlations, I really wonder how they've induced these statistics. Of course we need an A/B test to really understand the impact of this actuariall voodoo, but I really do wonder if they're charging a substantial premium above and beyond the statistical deviations.

I agree that it shouldn't be a factor unless the person has a criminal record. Would it be acceptable to use racial correlations for insurance?
 
Originally posted by: Triumph
Using credit history for auto insurance purposes should be illegal. It's just one more way for the insurers to make a buck. That's all.
Click to expand...

Why is that? If I was insuring someone, I'd want a damn good idea how likely they are going to be to pay me.
 
Like it or not, having good credit is a sign of responsibility.

Then again it's not always the case.

Look at RossMAN, for example.

Would you want to insure him?

😉

Viper GTS
 
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