You probably knew a bad credit score could impact your chances of securing a reasonable interest rate when buying a house or car, but did you know a low credit score could also impact how much you pay in car insurance? That’s the finding of a new study by InsuranceQuotes.com, as reported by al.com. Although your credit score is only one of several factors used in the calculation of your auto insurance premiums, it can have a large impact on how much you pay. In fact, your credit can have a larger impact on auto insurance premiums than any other factor, according to Consumer Reports.
In Alabama, drivers with poor credit pay an especially high penalty. Drivers with poor credit can expect to pay 190% more than drivers with good credit. That rate ranks Alabama sixth in the nation for the largest penalty for poor credit. Alabamians with fair credit can expect to pay 56% more drivers with good credit, the highest percent increase in the country. For comparison, Arizona, Nevada, and Michigan also had high penalties for average or poor credit. In contrast, California, Hawaii, and Massachusetts, forbids insurance companies from factoring credit into auto insurance premiums. In those states, car insurance quotes focus on driving record as opposed to future risk. [Read more…] about How Your Credit Score Impacts Auto Insurance Premiums