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Credits Checks and Car Insurance: What is the Connection?

It seems that a large number of items or services cannot be purchased without a credit check. Until recently purchasing a vehicle was the only part of a owning a car that required a credit check; however, that has changed. There are now a number of car insurance companies who are checking the backgrounds of new clients and existing policy holders to determine how much money they should pay for insuring their vehicle.

The use of credits checks for obtaining auto insurance is a topic that is highly debatable. There a number of individuals who claim that people who pay their bills on time are more responsible. It is said that responsible individuals are less likely to be involved in an automobile accident or receive a violation. Why the topic is so debatable is because there has yet to be any proof that has surfaced establishing a link between bad credit and automobile accidents. Even though a link has not yet been established between the two there are more and auto insurance companies that are developing a credit check policy on all new and existing policy holders.

Auto insurance companies use three of the main credit reporting agencies to determine the most recent credit score of a car owner. These three credit bureaus are Equifax, Trans Union, and Experian. It is important to remember that there are additional credit report bureaus; however, these three are the most popular. Car owners are encouraged to check their own credit history to determine if there are any errors in the report. This can be done by contacting the same credit bureaus as most insurance companies.

Car owners who have no credit or bad credit may have a difficult time finding a low cost car insurance policy. While checking the credit history of new policy holders is a fairly popular procedure there are still auto insurance companies who do not do it. It is possible for car owners with no credit or bad credit to find a no credit check car insurance company. No credit check car insurance companies may be difficult to find, but they are out there. What makes finding a no credit check car insurance company difficult is that many auto insurance companies do not outright advertise whether or not a credit check will be required. To find a no credit check car insurance company car owners are encouraged to directly speak with an auto insurance representative to get this and other important information.

An auto insurance policy typically lasts six month or one year. This time frame makes it easy for a car owner to improve their credit score without forever having to be stuck paying high insurance rates due to their bad credit. To improve a bad credit rating car owners are encouraged to make good on their overdue bills and continue to keep their current bills up-to-date. The best way to clean up credit is knowing exactly what needs to be cleaned up; therefore, it is important that car owners looking to improve their credit history request a copy of their credit report.

It may not seem fair that a car owner with a clean driving record has to pay more for car insurance just because of their credit; however, it is something that is unstoppable. The best thing that car owners can do is find a no credit check car insurance company for the time being and work to improve their credit. Once a car owner improves their credit it may be easier to find a low cost car insurance policy.