These days insurers place a lot more importance on applicants’ financial standing. If people cannot keep up with payments due to not having regular job or other reasons their credit score will deteriorate. Poor credit may affect vehicle insurance rates a lot or not at all depending on which state you live and who is your insurer. This is a bigger concern than most people may think. Fortunately, there are ways to make sure motorists can still get the lowest rates available in such circumstances.
How to Get the Cheapest Car Insurance for Bad Credit History
1. Premium differences between drivers with good and poor credit can be as much as 20% with some companies. The trick is to avoid those insurer that place high value on insurance scoring and go for carriers that don’t care much about it. Even though most companies look at your score you will see large price difference with only some of them. Shopping for the most competitive car insurance extensively is your best option to find the company that will offer you the most competitive vehicle insurance with bad credit history.
2. There are some companies who don’t check credit score 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 credit information when they calculate premiums. There aren’t really companies who advertise for not looking at financial position of their applicants. If there are automobile insurance companies who don’t look for credit score there is a high chance they are already in the non-standard market and their 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 history but remember that it may not be quick or easy.
3. If you are lucky your current insurer may not check your it for several years. Companies don’t necessarily check the credit rating of their existing customers every year. However, this is a slim chance and if you wanted to switch insurers new companies would check it.
4. If you are expecting a big change on your financial position shortly you may want to buy an annual policy instead of a six month policy. This way, you are safe for another year before you will have to accept higher auto insurance with poor credit history. current low rates for another year. Most providers offer attractive payment plans to help you out. But you should make sure that you don’t miss instalments. Companies are getting tougher on missed premium instalments and you may be back on the market looking for coverage. They will cancel auto insurance policies and will probably demand full payment to reinstate when premiums are missed.
5. Improving or maintaining good score should always be in your 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. While you are looking for the best automobile insurance for people with low credit score you should not let it slip further down.
Improving Your Credit Score
First of all, you need to remember that your history isn’t only made up of your payments and current borrowing. There are many other details go into it like how long you have stayed in your current address and how often you move. Credit 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 slipping down to a point so that you can get decent price on auto insurance with not so bad score.
One of the most effective ways of doing it is to talk to your 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 their customers to pay their bills. Starting to cut some of your expenses as soon as you realize there are problems ahead can relieve the pressure on your wallet too.
You can read how to improve credit score and car insurance rates on another post and there is no need to list them here again. If you can get around twenty percent savings on your auto insurance it is worth putting the effort in and increase the score. In addition, insurance 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 your finances well.
You can find the most affordable car insurance with bad credit for now and concentrate your efforts on fixing issues with your finances. It is something you have to face sooner or later because life can be harder when your financial history works against you.