Does My Credit Score Affect My Car Insurance Rate in Canada?

Why Do Car Insurers Want To See Your Credit Score?


bad credit car insurance

When you are out to get car insurance an insurer will want to see your credit score. This is to assess car coverage risks. If your credit score is high then you will be treated as a responsible driver. But if it is bad then you will be considered an unsafe driver. The car insurance rates for drivers that have bad credit are much higher.

Your credit score enables insurers to know:

1. Your credit debt repayment history
2. How many credit accounts do you have
3. The amount of credit you are using
4. The total debt that you owe as of the date

The manner in which you handle your credit debt shows if you are a responsible person or not. It helps insurers to know what to expect from you on road.

How Can You Check Your Credit Score?

Before you apply for car insurance quotes, you need to check your credit score. It will help you to know how you will be rated by insurers. You can check your credit score with Equifax and TransUnion. These are the two main credit rating bureaus in the country. They may charge some fee to let you digitally access your credit score. You can also get a free copy of your credit report once a year. You need to just visit the bureaus online.

Are You Having Poor Insurance Credit Score? Here Are Some Ways To Reduce Your Premium.

  1. Keep your driving record clean – If your driving record is clean then you will be seen as a safe driver by insurers. Besides, you may also get a discount from your car insurer. So, you need to make sure that there are no accidents or traffic citations on your driving record.
  2. Review car policy to cut down costs – You can save money by reviewing the policy that you are about to finalize. There may be some car coverage features that you might not need. You can ask to get them removed before you sign the deal.
  3. You can choose to pay a high deductible- If the deductible is high then the car premium will be low. Hence, when your budget is limited, you can choose a high deductible as it will help you to save money.
  4. To get the lowest rates you need to shop – You need to shop and get free quotes from several cars insures. If you compare them in terms of their coverage features and pricing then you can find the best quote for you.
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