The Impact of Your Credit Score on Auto Insurance Rates

Your credit score significantly affects many aspects of your life, including your auto insurance rates. While it may seem unrelated to your driving habits, insurers often use credit-based insurance scores to help assess your overall risk as a policyholder. At 1st Choice Insurance Group, we will help you understand how your credit score may affect your premiums and guide you toward the right policy that fits your coverage and budget needs.

Why Do Insurers Consider Credit Scores for Auto Premiums?

Insurance companies use a variety of factors to determine auto insurance rates, and your credit score is often one of them. Insurers may view individuals with higher credit scores as financially responsible, which may translate to lower risk. As a result, those with better credit scores may receive cheaper insurance premiums.

How Your Credit Score Affects Your Auto Rates

If you have a high credit score, insurers may see you as a policyholder less likely to default on premiums and file claims. On the other hand, a lower credit score may lead to higher premiums as you may be viewed as a higher risk.

The impact of your credit score on your premium can vary by state and insurer. In Ohio, insurers may rely on factors like a credit-based insurance score to calculate auto premiums. Other factors that may affect your premium include your age; ZIP code; driving history; and your vehicle’s make, model and mileage.

5 Ways to Improve Your Credit Score and Lower Your Rates

Improving your credit score is a good place to start if you want to lower your auto insurance rates. Here are some steps that may help you do so:

1. Pay your bills in full and on time to build a positive payment history.
2. Reduce your outstanding debt and keep credit card balances low.
3. Keep your oldest credit account open to maintain a longer credit history.
4. Avoid applying for multiple credit cards in a short period of time.
5. Review your credit report regularly.

Where to Get Auto Insurance in Ohio

Contact 1st Choice Insurance today for a personalized quote.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.