Credit Advice

Have a question? Have advice to share? The combined knowledge and experience of everyone in the Credit Karma community can help you. Enter your question or help others below to get started!

Question

Posted in Auto Insurance
Profile Image

Question By
Mellicherie

0 Contributions
0 People Helped
Is my credit ran to calculate my auto insurance rates?
I am 31 yrs old and love in Houston. I pay $298 a month for my full coverage auto insurance no wrecks up until 3 months ago why are my monthly payments so high? Is my credit ran and is my credit score used to calculate my auto insurance monthly payments?

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW
All Responses

Results 1-10 of 24Results per page: 5 | 10 | 25Page 1 of 3   Previous | Next
1 Contribution
59 People Helped

Credit on Insurance

Helpful to 59 out of 69 people

In most states I believe including Texas, your credit is run and DOES affect your auto and home insurance rates. I used to have people the same age same insurance situation have differences of over $100 a month just based on what rating class they were in after running their credit. It stinks but your best bet is to shop around. There are ways you can save. Try and bundle your insurance (auto, home, renters) and carry high liability limits as most companies give you a positive rating factor during renewal and it will help you should you decide to move to a different company in the future (could save you hundreds). Any defensive driving classes are good if the insurer gives you credit for that. Having accident and ticket free drivers on your policy that you share you car with can help reduce your rate because the use of your car is split with another safe driver. I hope this helps a little. Best of luck.

4 Contributions
48 People Helped

Steve C

Helpful to 47 out of 59 people

I am 62 yrs old and Have not had a ticket in 40 years, and have a commercial Drivers License Class B with Air Brake endorsement, Motorcycle Endorsement, Passenger Endorsement for my Church Bus, and have NEVER had an accident that was my fault, but WAS hit by a motorist that had no insurance, therefore my Uninsured Motorist had to kick in, and I drive a 1995 GMC Conversion Van with Full coverage, and have Poor Credit 579 score and my insurance is $69,25 per MONTH !!! on a vehicle THAT OLD, and with NO TICKETS in 40+ years, now you'll NEVER get me to believe that they are not taking my Credit into consideration to come up with this High of a Price for a 1995 Vehicle, They don't seem to care about your Driving record,,,, only your Credit !!!

Reply by
Izzo31

2 Contributions
19 People Helped
Helpful to 19 out of 31 people

The age of your vehicle is only one factor. Older vehicles tend to still be made from steel and can do more damage than newer vehicles, thus higher liability if you were to be in an accident. If your vehicle is more likely to roll over that can cause it to be higher as well. You could probably drop comp/coll and hardly see a drop in price because you are mostly paying for the liability. Imagine if you were to smash into someones brand new $40,000 car and really hurt them (say over $100,000 in medical bills). Does $70 a month really seem so bad then?

Reply by
marnjG

1 Contribution
18 People Helped
Helpful to 18 out of 23 people

Enter Your ReplyThat is very true your good driving meens nothing GOOD CREDIT BRINGS INSURANCE DOWN AND MY INSURANCE TOLD ME THIS!!

Top Contributor

Reply by
zevus

65 Contributions
153 People Helped
Helpful to 12 out of 14 people

I had a similar issue, w/ my car insurance rates going up about 50% after a credit check.  These occur every 2 or 3 years for existing policies & they'll also explicitly state in their renewal letter if the rate was increased due to this credit check.  There's no reason to settle for that increase, though.

I also have a pristine driving record & no insurance lapses over the time period they're permitted to use (5 years for major accidents or DUI related offenses & 3 years for general traffic/moving violations, I believe?). 

Rather than settling for that 50% increase, I got on the phone and called my insurance agent and said I wasn't going to continue the policy w/ the new rate.  I ended up getting a new policy that was even cheaper than the original "pre-bad-credit" adjusted policy.  It *did* require me to pay a full year in advance, though (obviously may not be possible for some folks).

As some people may be interested & located around the same area -- my new policy is with Worth Casualty Company (they're based in Fort Worth, Texas).  

The total for one year was $242 (that's with car being paid off & the minimum liability coverages).  Progressive was planning on raising my rate to ~$600 a year.  Quite a savings, there ... 

Reply by
insurlady

1 Contribution
0 People Helped

I would advise you to drop the full coverage oon that '95, if the accident is your fault you won't get much anyway.  The value at the point is less than $1000.

Reply by
Pickyvicky

2 Contributions
0 People Helped

I  am 73 and bad credit from health issues.  The only thing I have on my credit reports are ambulance and etc.  and have never had a chargeable accident and no citations in the past 20 years and my insurance doesn't go down because of my credit score.  YOU CAN'T WIN  - I have Geico and it is the lowest I have found - only minimm liability and that is it - older car too - BUT Geico uses Clue Report and Lexis Nexis on the credit scores for renewal and guess what - it went up - - - I pay $44 a month for just liability - minimum - SO good luck - - Seniors get no breaks 

Top Contributor
30 Contributions
58 People Helped
Most Helpful Response

LexisNexis

Helpful to 20 out of 21 people

Shop around. Shop shop shop. Basically the insurance industry uses "Reason Codes" provided by good ol LexisNexis to keep your rates high. It is, IMO a practice that should be illegal. They are predicting an accident claim before it happens.  For example..... "Code 0134 - Number of Department Store Accounts Established. Insurance industry research shows that consumers who open accounts with department stores experience more insurance losses." Yes - if you have a department store credit card, they can use that against you to raise your rates. I know this code because they used it against me before! There are hundreds if not thousands of codes with similar, and often contradicting, reasons. You can simply google the above reason code and find the page that lists them. Its sickening. There is no way to get a perfect score because they can and will use any excuse to keep your score from being perfect! 

Reply by
32119

5 Contributions
104 People Helped
Helpful to 3 out of 4 people

I agree. I have no department store cards, my credit score is 817 and I drive a 2011 Camry. I did have an at fault accident 2 years ago but my rate only went up about $50 per year. I am paying around $736 a year right now and have no idea if that is good or not but every other company I have checked with wants more than what I currently pay so I am staying with this company for now.

Reply by
Gingerdanger

2 Contributions
1 Person Helped

THANK YOU FOR THIS INFORMATION!!!!!

1 Contribution
33 People Helped

Insurance rates

Helpful to 33 out of 37 people

Also to drop your rates, take a drivers safety class; That will drop your rates 10%. see which ones are approve by your state and/or company.

1 Contribution
24 People Helped

Monthly vs semi-annually

Helpful to 24 out of 31 people

One way to reduce your rate is to pay up front for the longest term offered.  Usually semi-annual or annually. 

People who pay monthly will ALWAYS pay more.

1 Contribution
18 People Helped

Auto Insurance Rates

Helpful to 18 out of 20 people

I would suggest that you shop around. 21st Century is a great deal less expensive.

1 Contribution
21 People Helped

Way too much

Helpful to 21 out of 28 people

You really need to shop around.  I am older than you (52) and I pay 477 for the entire year for full coverage on my 2014 vehicle.

I don't know if you can get Erie Insurance (check on their website https://www.erieinsurance.com ) in Texas but I do know that Geico rate are only slightly higher.

Reply by
sag2horses

1 Contribution
11 People Helped
Helpful to 11 out of 13 people

Enter Your Reply I have Geico and I haven't been able to find anyone with lower rates; I've had them for several years and have the payments auto-drafted out of my account, could be one reason why.  No tickets or accidents for either driver and we're both over 60.

Reply by
kitten1943

1 Contribution
17 People Helped
Helpful to 7 out of 7 people

Enter Your Reply:  What is the ARP - HARTFORD rate?  Not sure what the age is to qualify for the lowest rates.

We have MAXIMUM liability rates - small deductibles - and a 2015 Cadillac cross over + a 1957 chev belaire at stated value of $ 55,000.  Our yearly rate is $1,200 a year.  This can be lowered by decreasing the limits - but after we experienced a death of our child in an auto accident I WILL NOT even consider lower limits of leability.  Check them out and see if age wise you qualify. 

1 Contribution
5 People Helped

Helpful to 5 out of 6 people

credit does make a difference in your rating with insurance companies. When you receive a quote from a company they do a soft pull on your credit, basically they don't dig into your background. If you have bad credit or no credit there are companies that cater to you. Find independent agencies, they have multiple non-standard companies that DO NOT run your credit! I know we live in a society where we want "brand name" things. But there are some really good non standard insurance companies as well; you'll be surprised. "Brand named" companies like, Geico, State Farm etc, are more favorable to preferred customers. I.e, those who have no tickets or accidents, those who have decent insurance scores, drivers with prior insurance, etc. There are so many factors that go into insurance ratings we as agents can hardly keep up! So, my suggestion is keep looking until you find something reasonable to your budget and stick with it! 

Oh! And ratings depend on the city and state you live in as well! If you live in a city where the accident percentage is higher in your state, then you more risky to insurance companies. One user was right about something, insurance companies automatically assume you are a risky driver. But you could be a low risk, safe drivers or mature drivers, or you could be a high risk, drivers that have a lot of tickets and accidents, young drivers. 

2 Contributions
15 People Helped

Auto Ins.

Helpful to 10 out of 14 people

Be certain to compare with other insurance co.   Make sure you compare the same coverages with them all.

Reply by
angelpaly

2 Contributions
3 People Helped
Helpful to 3 out of 5 people

Enter Your ReplyI have excellent Credit an a deer hit me. and my price went up. I guess having excellent credit did not help me here.

1 Contribution
3 People Helped

Auto Insurance Rates

Helpful to 3 out of 5 people

This is in response to the person that asked if your credit score is run when you apply for auto insurance and if so, does it also determine what your monthly premiums would be....

I know for sure that in Wisconsin your credit score IS ran when you apply for auto insurance and it DOES help to determine what your monthly insurance premiums will be. The last time I shopped around for car insurance and was getting quotes from different agencies, one of them mentioned that it is all based off a person's credit score/rating. I asked what the reasoning is and they said that it is assumed that people with poor credit are most likely to also be higher risk drivers. This makes absolutely no sense to me and it's not right. My credit is ruined because I began having health issues about 13 years ago and I have piles and piles of medical bills that have gone to collections. At first we were paying for all the medical expenses with our credit cards thinking that I would get "fixed" and be able to return to work . Basically, we would pay the credit cards back down after I returned to work. Unfortunately, I am not "fixed" and I cannot return to work. Instead, I have gained over $100k in medical bills for myself and our daughter was in an ATV accident that racked up another $100k+ in medical bills. We never did get to pay our credit cards back down. Instead and in addition to losing my income and all the medical bills that piled up over the years, we fell behind on a couple credit card bills and it all snowballed from there. Anyway, the point is that I now have poor credit but I have a perfect driving record. I have never had any kind of ticket and I've never been in an accident in my life. We should not have to pay more for insurance because we have poor credit. We should pay less because of the flawless driving record. Unfortuneately, that is not how it all works just like many other aspects of what our government has "created"!  Over all, if you have anything that drives your credit report/score down (whether you had any control over it or not) you will end up paying more for insurance, interest rates, etc. In our case we will forever be punished because I have medical issues and our daughter had an accident. NOT RIGHT!!!

Results 1-10 of 24Results per page: 5 | 10 | 25Page 1 of 3   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW

Reply to this Question

Write your response:
Enter Your Comments

The Credit Advice pages of the Site may contain messages submitted by users over whom Credit Karma has no control. Credit Karma cannot guarantee the accuracy, integrity or quality of any such messages. Some users may post messages that are misleading, untrue or offensive. You must bear all risk associated with your use of the Credit Advice pages and should not rely on messages in making (or refraining from making) any specific financial or other decisions.