Most people know that having bad credit can be very detrimental. However, many may not fully realize how wide of a range of things having a bad credit score can end up impacting for a person. Bad credit can not only affect a person’s ability to get a loan or lease, but also can have negative implications when it comes to things that a person might not see as being that connected to credit.
One such thing is auto insurance. A person’s credit score is one of the many things auto insurance companies sometimes use in calculating what sort of insurance premium they are going to charge a person.
A recent investigation by Consumer Reports looked at how much of an impact the quality of a person’s credit score has on what their auto insurance rates are. The investigation found that credit score level can have a very big impact on such rates. For example, the investigation came to the conclusion that, country-wide, individuals with the best credit scores have an average annual auto insurance premium cost that is $214 less than individuals who have just good credit scores.
Now, how much of an impact on their auto insurance cost level a person could end up experiencing in relation to changes in their credit score will likely depend in part on where they live. Credit score level’s effect on auto insurance rates varies from state to state. And there are currently three states, Massachusetts, Hawaii and California, that prohibit auto insurance companies from considering credit scores in their calculation of insurance rates.
How big of an effect do you think credit score level has on auto insurance rates for individuals in Mississippi?
One of the things that can lead to a person experiencing significant drops in their credit score are debt struggles. Given the major and wide-ranging impacts a bad credit score can have, when a person is experiencing debt problems, it can be very important for them to find a way to get out from their debt problems and into a position where they can start to rehabilitate their credit score. Bankruptcy attorneys can help individuals who are having debt difficulties review what legal options they have for trying to get back on the right course financially and credit-wise.
Source: Money, “Bad Credit Can Be Worse Than a DUI for Raising Auto Insurance Rates“, Brad Tuttle, July 30, 2015