What does credit have to do with auto insurance?

You know that your bad credit prevents you from getting the best rates when it comes to auto loans and other advances. Did you also know that poor credit history affects auto insurance as well? Your ability to pay your bills on time comes with more benefits than you think.

Why it is important to maintain good financial credibility

The average American living in Austin, Texas, stays within his means and strives to pay bills in a timely manner. Some consumers, however, do not deem it necessary to maintain such good credibility. These individuals may view dedication to good credit as important only when attempting to purchase a home or car.

There is more to financial health than showing good numbers when you want to buy a new house or car, though. Auto insurance providers consider your track record on paying bills when determining how much to charge in monthly premium fees. It is not uncommon for those with low credit scores to pay more for the same coverage that individuals with better credibility get for a fraction of the price.

What does it mean to have “good” credit?

Financial credibility is affected by multiple factors such as the length of your accounts and spending frequency. It is possible to have better credit with fewer revolving accounts than the person who has multiple credit cards with high balances.

Those looking for cheap auto insurance in Austin, Texas, may want to keep their credit scores above 650. Those with credit scores above 700 may save even more money.

Other factors that affect auto insurance

Of course, affordable insurance in Austin, Texas, does not solely depend on a consumer’s financial credibility. Your driving record also has a lot to with how providers rate and charge you for monthly premiums. Those with poor driving records are sometimes viewed as higher risks for accidents. Thus, auto insurance providers may be inclined to charge more for monthly premiums.

Your occupation and marital status also determine how much you pay for car insurance every month. Those with careers that require advanced degrees may find themselves with hidden discounts that individuals without such education cannot obtain.

It is best to speak with an auto insurance agent to determine just how much you can save with a plan.