Research has shown that there is a strong link where drivers with bad credit, have bad driving records, so insurance companies believe that those who have a below average credit score are more likely to make frequent automobile claims. Insurance companies look at different factors of credit information. They don’t care where you get your credit from or what you are requesting to have credit for, they only look at how well you use that credit. Insurance companies cannot get access to your entire credit history, they can only see your actual credit score. They are checking to see if you pay things on time, not which credit card company you prefer.

All car insurance companies have different rates and use different parts of your history to build a policy. It is important to look into each company to see what they determine to be important when establishing coverage. Having a lack of credit history can hurt your rates for insurance just as much as having too much of a poor credit history. It shows that other companies won’t take a chance on you. Insurance companies don’t care how much money you have in the bank or if you pay cash for everything. They want to see documentation that you are responsible. Getting copies of your credit report and knowing what information is on there will help you out in many areas of life, including car insurance premiums.

Factors of credit that are looked at are delinquencies, bankruptcy, time with a credit company versus the number of different companies credit is established with, and the number of accounts opened with in the previous year. Insurance agents have to ask permission before applying credit information in quotes. Not all companies use credit history as a factor, so it is important to shop around and find the company that is a good fit for the driver.

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Article Source:http://www.articlesbase.com/insurance-articles/how-my-credit-score-determines-my-car-insurance-premium-1494842.html