Most people know that factors such as driving history play a large role in their car insurance rates, but what about their credit score? That’s right, your credit score can affect the rate you receive from an insurance company. Drivers with low credit scores end up paying more for their insurance than drivers with great credit scores. This post will discuss ways to improve your score so you can find a better rate.
High-Low Credit Scores
Before we get into improving your credit score, it would be helpful to know what a good score is and what a bad score is. For starters, the lower the score the worse the rate you receive will be. In fact, this is true for other major purchases as well, such as a housing loan. People with good credit scores end up having lower interest rates on their loans. However, people with low credit scores pay for it with high-interest rates. With that being said, a low score ranges 300-579, a fair score is 580-669, and everything above 669 is good or great. According to The Zebra, drivers with low scores reportedly paid $1,500 more than those with the highest level of credit. So, if you find yourself with score under 669, you are likely paying more for insurance.
What You Can Do To Improve Your Score
Since your score affects the rate you will receive, it would help to know what you can do to improve your credit score. Paying off credit cards, loans, or just making payments on time improves your score, however, you should not expect to see significant changes right away. So, as you pay off loans, you should shop around for quotes. It’ll give you an idea of where you are at and help you see your savings when you find that low rate.