Are Car Insurance Rates Affected By Bad Credit Car Loans?
You're someone who obeys the rules of the road. You use your turn signal at every corner. You stop at red lights. You don't speed. So why is your car insurance premium far higher than you expected? It may be the type of car you buy, the history of your driving record but what about the fact that you have a bad credit loan under your name. If you have any blemishes on your credit report then this could increase your car loan interest rates, but can it also affect your car insurance rates?
What You Should Know
Although personal credit history shouldn't have an impact on insurance rates, it can have an impact on how your insurance is financed. If you choose to pay your insurance all at once it may not be a problem. But if you finance it over the course of, say, 12 payments your credit history may influence what you pay.
Keep in mind that lenders are required to tell you the reason why you aren't qualifying for the best possible car loan rate. One of the main reasons why lenders are afraid of offering the best possible rates on individuals with poor credit is because they may see them as having a higher risk for getting tickets or breaking the law with their vehicles. In general, some assume that people with greater financial responsibility will drive more responsibly. But is this really the case?
Take note that just because someone has a bad credit score, doesn't necessarily mean that they are more or less prone to experiencing an accident. And while this is probably true, because there is a history of credit problems, your insurance premiums can possibly be affected. With that being said, we'll dedicate the next few sections to showing you how you can receive good loan rates anyway, and possibly balance any extra you may pay for insurance.
Knowing Your Score
Make sure that you are always in the know for your credit score. Being equipped with this information won't leave you surprised when speaking with an insurer or lender and will allow you to negotiate a better deal. Checking your credit score is also important because it will ultimately provide you with the chance to fix any errors on it. Try to check your credit score at least once per year.
Other Ways to Protect Yourself
There are also a few other ways to protect yourself from car loan financers who are attempting to provide you with less than premium rates:
You can order it online and there are a variety of issuers who can do this for you like Equifax. If you do find an error then call your credit agency and sort it out with them. Taking the time to do this will ultimately allow you to receive better car insurance financing rates later on down the road.
What You Should Know
Although personal credit history shouldn't have an impact on insurance rates, it can have an impact on how your insurance is financed. If you choose to pay your insurance all at once it may not be a problem. But if you finance it over the course of, say, 12 payments your credit history may influence what you pay.
Keep in mind that lenders are required to tell you the reason why you aren't qualifying for the best possible car loan rate. One of the main reasons why lenders are afraid of offering the best possible rates on individuals with poor credit is because they may see them as having a higher risk for getting tickets or breaking the law with their vehicles. In general, some assume that people with greater financial responsibility will drive more responsibly. But is this really the case?
Take note that just because someone has a bad credit score, doesn't necessarily mean that they are more or less prone to experiencing an accident. And while this is probably true, because there is a history of credit problems, your insurance premiums can possibly be affected. With that being said, we'll dedicate the next few sections to showing you how you can receive good loan rates anyway, and possibly balance any extra you may pay for insurance.
Knowing Your Score
Make sure that you are always in the know for your credit score. Being equipped with this information won't leave you surprised when speaking with an insurer or lender and will allow you to negotiate a better deal. Checking your credit score is also important because it will ultimately provide you with the chance to fix any errors on it. Try to check your credit score at least once per year.
Other Ways to Protect Yourself
There are also a few other ways to protect yourself from car loan financers who are attempting to provide you with less than premium rates:
- Ask the insurance company and lender about the factors that are preventing you from receiving the best possible rates. By asking this you may learn something about your credit score that you can fix and then return for a better rate.
- Regularly monitor errors. Keep in mind that you can receive a free copy of your credit report and history once per year. However, it is highly recommended that you check it at least two to three times per year and ensure that it doesn't contain errors.
You can order it online and there are a variety of issuers who can do this for you like Equifax. If you do find an error then call your credit agency and sort it out with them. Taking the time to do this will ultimately allow you to receive better car insurance financing rates later on down the road.
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