Why do auto insurance companies check your credit score?

Auto insurance companies will check your credit as a way to assess whether you would be a good customer to take on. If you have bad credit, it may give them the thought that you will be less likely to pay your premium. Insurance companies can deny you if your credit is bad.

Essentially, what they are saying is based on your credit history we don’t think you’ll pay your bill. Keep in mind credit history is only one area they will look at. Most companies won’t deny you if your credit is bad but they may make you pay higher premiums.To increase your credit score make your payments on time.

Make sure to pay off your debt as quick as you can. When you do these things, you’ll have a good credit score in no time.

Car insurance companies want to check you credit score to understand your financial position. The lower your credit score, the higher your chances of making claims even for small damages. Insurance is a business and they need to know how much risk you present to the company.

Source: aarp.thehartford.com.

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