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Does Your Credit Score Affect Your Car Insurance?


Car insurance is a mandatory part of driving, but it can be very expensive. There are a lot of different factors that affect the price of your car insurance. Most of these are well known, such as how long you have been driving, any accidents you have had, and your age. However, lots of people are still asking does your credit score affect car insurance.

Does credit score affect car insurance?

The simple answer is that yes, your credit score can affect your car insurance. You will generally find that car insurance costs more if you have a poor credit rating. This is especially true if you pay for your insurance monthly since someone with a poor credit rating would be considered a higher risk to the insurance company.

The link between your credit score and car insurance is mainly due to companies worrying that people with bad credit ratings will not make their monthly payments.

Does my credit score affect car insurance if I pay annually?

If you pay for your car insurance annually, you may find that there is less of an increase if you have a bad credit rating. This is because once you have paid the entire amount, the insurance company does not have to worry about whether or you will make payments.

Does CCJ affect car insurance?

A CCJ is a County Court Judgement meaning you failed to pay back a debt. This will be on your credit score. Insurance companies will be able to see this when they check your credit rating. Some companies may not offer car insurance to people with a CCJ or other negative marks on their credit history.

Does paying car insurance monthly affect your credit score?

Any monthly payments, including car insurance, can affect your credit score. This is because the more monthly payments you have, the higher risk you are considered, especially if your income is low. So there is often a link between monthly insurance payments and credit scores. 

How can I improve my credit score?

If you want to improve your credit rating and improve your chance of getting cheap car insurance, there are several things you can do. The most important thing is to make sure you pay back any debts quickly and do not miss any payments. You can also reduce the number of monthly payments you have going out.

Is it better to pay for car insurance annually or monthly?

If you can pay for your car insurance annually, so much the better. Annual car insurance is usually cheaper in the long run compared to monthly payments, and you will also have more options even if you have a poor credit rating. However, this means having to get all the money for your insurance upfront.

What insurance can I get with a poor credit rating?

Even with a poor credit score, there are several insurers who will offer different types of car insurance, including third-party and fully comprehensive insurance. Quotezone can help you compare insurers for poor credit ratings, so you know what the best deal is for your situation.

This article is intended as generic information only and is not intended to apply to anybody’s specific circumstances, demands or needs. The views expressed are not intended to provide any financial service or to give any recommendation or advice. Products and services are only mentioned for illustrative rather than promotional purposes.