How Your Credit Score Affects Your Car Insurance Rate

Most consumers shopping for auto insurance wonder the purpose of their social security number on an application. Many don’t understand what their credit score rating could ever have to do with their car insurance, however, the relation is quite simple. Insurance providers have a responsibility to protect themselves by insuring drivers that are not high risks to their company. For this reason, several companies focus on an applicant’s credit score before they can secure an auto insurance policy.


Identity theft has become an increasing problem around the world. One of the main reasons that car insurance companies utilize an applicant’s social security number is so that they can easily identify them. This prevents duplicate policies from being created without the applicant’s knowledge.

Risk Factor

Another common reason that applicants are required to supply a social security number is to determine their level of risk. Insurance providers want to know a driver’s credit history to ascertain whether or not the driver has the ability to pay the premium on time. Negative credit ratings means that the driver has a history of not paying timely bills, whereas a positive one means the driver is not as high of a risk.


Lastly, insurance providers review your credit score as a method for determining how much they are going to charge you as a premium. For those with lower credit scores a higher rate may be charged because they are a higher risk, however, someone with a higher score is less of a liability and thus can be charged less.

Inquire About Discounts

Having bad credit should not stop drivers from becoming insured. Not having insurance could put them at risk for serious violations and fines. If you believe that your credit score is affecting the cost of your premium, consider talking with the customer service department about obtaining discounts on your policy. Some discounts may be able to compensate for the spike in premium amounts.

The auto insurance industry continues to be very competitive. For this reason, finding ways to save money and stay covered should be a top priority. Take your time in locating a company for Auto Insurance in Casa Grande, AZ such as Mr. Insurance to find out how your credit rating affects your policy and what you can do to rectify that.

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