How Does Your Credit Score Influence Auto Insurance Quotes?
Everyone seems to be obsessed with finding the absolute lowest price on car insurance. At least that's what I've learned from watching TV over the past decade or so. But how much does your credit score influence the quotes you receive from various companies?
WalletHub has released an in-depth examination of the connection between your credit score and the amount we pay in insurance premiums. They obtained quotes from five of the largest auto insurance providers in the country for two hypothetical consumers who are identical, except for the fact that one has excellent credit while the other has no credit. Here's what they found:
- Car insurance premiums in Illinois can fluctuate by 61% based on credit score.
- Farmers Insurance appears to be the company that relies on credit data the most nationally, with the WalletHub Scenario revealing a 62% fluctuation in premiums between a consumer with excellent credit and a consumer with bad credit. Geico seems to rely on credit data the least, displaying a 32% premium fluctuation.
- Credit data has the least impact on insurance premiums in Connecticut (15% fluctuation) and the greatest impact in the Michigan (115% fluctuation).
- Progressive is the most transparent carrier about both the use of credit data in quote generation and the source of that credit data, scoring the maximum 10 points in this category. In contrast, Liberty Mutual – the lowest scoring provider – obtained a score of only 4.5.
You can find out more at WalletHub's website. The bottom line is, much like in other areas, it's a good idea to have a good credit score and the better the score the more you might save.