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Credit Score FormYou're probably well aware that if you want to buy a home or car (or even lease a home or car), your credit score is important. Does your credit score affect your auto insurance policy, though? You may be surprised to learn that your credit score does matter when you go to purchase a Georgia auto insurance policy. Read on to learn why insurers care about your credit score.

Insurers Evaluate You Based on Credit-Based Insurance Scores

Like your credit score, your credit-based insurance score is calculated based on your credit report and history repaying loans. Unlike your credit score, though, your credit-based insurance score is calculated without factoring in personal data such as your occupation, earnings history, race, gender, etc. Insurance companies consider your credit-based insurance score along with several other factors, such as your driving and claims histories, to determine how risky it will be for them to insure you.

Research Confirms That Credit History is a Good Indicator of Risk

On the surface, it may seem that a person's credit history would have little to do with the likelihood he'll submit a car insurance claim. Studies indicate otherwise. Researchers at the University of Texas analyzed more than 175,000 car insurance policies, looking at policyholders' credit-based insurance scores as compared to how many claims (and the dollar amounts of those claims) they filed against their insurance policies. Policyholders with higher credit scores had fewer claims and claims payouts, and posed less risk to insurers than policyholders with low credit scores. The Federal Trade Commission conducted a similar analysis and also concluded that credit history is an accurate predictor of risk.

What Does This Mean to You?

If you don't know what your credit score is, you should find out. If you haven't checked your credit report lately, you need to. Thanks to the Fair Credit Reporting Act, you're entitled to obtain a free copy of your credit history and challenge errors if you find them.

Whether you have impeccable credit or less than stellar credit, Fleming & Riles Insurance is committed to working with you to help you secure auto insurance. Call us at (800) 833-4379 to get a free quote.
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