Costly Car Insurance? Your Credit Score Might Be to Blame

Photo by M. Primakov / Shutterstock.com

Do you have a great driving record, but you’re paying through the nose for auto insurance? There is a good chance factors that have nothing to do with driving safety — like your credit score — might be to blame.

A recent car insurance analysis from Consumer Reports reveals that on average, a two-car couple with dismal credit will pay a whopping $2,090 more for car insurance than a similar couple with excellent credit. According to Consumer Reports:

That’s more than what it usually costs to add a teen driver or even the penalty for having two DWIs.

How to lower your car insurance costs

As we’ve reported before, your insurance rate could also take a hit based on your income or whether you rent or own your home.

But you might be able to save yourself some cash on your auto insurance premium. The best place to start is by shopping around with different companies and comparing their prices. To find the right car insurance company, check out our Solutions Center.

Get more tips on slashing your car insurance premiums in “9 Ways to Drive Down Your Auto Insurance Rates.”

If your mediocre credit score is indeed the culprit behind your costly car insurance, we can help. For starters, find out what your credit score is. For more information, check out “Ask Stacy: Where Can I Get a Free Credit Score?”

After you get your hands on a free copy of your credit score and you know where you stand, it’s time to start working on improving your score.

One of the first things you should do is to begin paying down your balances, since up to 30 percent of your score is based on the amount of money you owe. As Money Talks News contributor Maryalene LaPonsie writes in “Boost Your Credit Score Fast With These 7 Moves” :

Live lean for a few months, hold a garage sale or pick up a temporary second job to find the cash needed to drop your credit card balances.

Are you surprised by what insurers consider when determining your car insurance rate? Share your thoughts below or on Facebook.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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