Lately, underwriters place a lot more importance on applicants’ credit score and and can offer as much as 25% cheaper prices when it is good. Therefore it is important to make sure that you know how you can still get affordable automobile insurance rates when the current financial difficulties you are facing is a stumbling block.
If people cannot keep up with payments due to not having regular jobs or other reasons their money situation will deteriorate and it may affect premiums a lot or not at all depending on which state you live and who is the carrier. This is a bigger concern than most people may think. Fortunately, there are ways to make sure motorists can still get the lowest prices available in such circumstances.
How to Get the Cheapest Auto Insurance for Bad Credit History
1. Premium differences between drivers with good and poor score can be as much as 20% with some. The trick is to avoid those carriers that place high value on insurance scoring and go for ones that don’t care much about it. Even though most companies look at it you will see large price difference with only some of them. Shopping around extensively is the best option to find the one that will offer you the most competitive vehicle insurance with bad credit history.
2. There are some who don’t check it and few states -California, Hawaii and Massachusetts- don’t allow it to be used in premium calculations. However, about 90% of car insurers look at this information when they calculate premiums. There aren’t really companies who advertise for not looking at financial position of applicants. If there are there is a high chance they are already in the non-standard market and rates are usually much higher in comparison to high street brands. By all means get quotes from them but make sure to get alternative quotes from usual names as well. You can find the best car insurance with poor credit score but remember that it may not be quick or easy.
3. If you are lucky the current one may not check it for several years. They don’t necessarily check the rating of existing customers every year. However, this is a slim chance and new ones would check it if you wanted to switch.
4. If you are expecting a big change on the financial position shortly you may want to buy an annual instead of a six month policy. This way, current low rates are safe for another year before you will have to accept higher premiums. Most providers offer attractive payment plans to help you out. But you should make sure that you don’t miss installments. They are getting tougher on missed instalments and you may be back on the market looking for coverage. They will cancel policies and will probably demand full settlement to reinstate.
5. Improving or maintaining it should always be in mind. It may not be as hard as you think. For example, avoiding to move too many times may help you keep it healthy even though you are having financial problems. So, you can still get cheap automobile insurance with bad credit. You need to try not let it slip further down.
How to Improving the Score
First of all, you need to remember that the history isn’t only made up of payments and current borrowing. There are many other details go into it like how long you have stayed in the current address and how often you move. Rating agencies and lenders like people who are not moving around much. So, even you are having money problems at the moment you can still prevent it from going down further.
One of the most effective ways of doing it is to talk to lenders and utility providers and come to some sort of agreement on a payment plan before they go ahead and report you to agencies who prepare the reports. Being proactive is better than letting things take their own direction and causing serious problems in the future. Most companies are happy to make it easier for customers to pay bills. Starting to cut some of the expenses as soon as you realize there are problems ahead can relieve the pressure on your wallet too.
You can read about improving the score and rates on another post and there is no need to list them here again. If you can get around twenty percent savings it is worth putting the effort to maintain it. In addition, it is only one area it can help you get better deals. You can get cheaper automobile loans and mortgages as well when you prove that you can handle money well.
You can find the most affordable car insurance with poor credit for now and concentrate efforts on fixing issues. It is something you have to face sooner or later because life can be harder when the financial history works against you.
Also, you should avoid trying to find quick and temporary solutions. Many people get into deeper troubles when they are impatient and looking for miracles overnight. Things like payday loans may look to solve the cash problems for now. But it can be very hard to get out of it once you keep getting another loan to pay for the one outstanding.