7 Things That Increase Your Car Insurance Rate
Credit Rating
The Federal Trade Commission revealed in a research from back in 2007 that the frequency and expense of auto claims may be closely correlated with a driver’s credit score. As a result, many insurers utilize a person’s credit score (which may indicate potential late payments) or insurance score (which may indicate if a person would make a claim) to determine how much they will charge for auto insurance. Your rate will increase with your credit score because you pose less of a risk than someone with a low score.
According to the Consumer Federation of America, good drivers who also happen to have fair or low credit are discriminated against when credit scores are used. Residents of California, Hawaii, Massachusetts, or Michigan need not be concerned about this because it is illegal for auto insurance to utilize a person’s credit history when determining rates in these states. A credit score restriction was also in place in Washington, but it was repealed in July 2022.
