In these tough economic times, it makes sense for people to ask more questions before committing to anything = handing over their hard-earned money. A great example of this is what our digital gurus have picked up on, which is that more people are searching online to see if getting a car insurance quote will affect their credit rating.
Exploring this makes sense, because your credit rating affects a lot of important areas in your life, such as whether the bank will approve your home loan application. As far as the bank is concerned, your credit score tells them how much risk you are taking. If you get a good score, you are more likely to get the loan and buy your dream home.
But we got sidetracked. You want to know if getting a car insurance quote will affect your credit.
what is the answer?
The simple answer is no. Getting a car insurance quote will not affect your credit rating at all. However, it must be said that insurance companies use a combination of factors to assess your risk and decide whether to grant you a policy, in addition to the insurance premium you will pay.
These factors include things like the age, make, and model of the vehicle, as well as your age, driving history, and… your credit score.
Wait, How Does Your Credit Score Affect Your Car Insurance?
While getting an insurance quote won’t affect your credit score, your credit score can affect your car insurance in three main ways.
First, your credit score is a very strong indicator and even an indicator of your financial behavior. It tells the insurance company how likely it is that your bills will be paid (or not paid), which gives them an idea of whether you’ll become a reliable policyholder. If they think you will not be able to meet your obligations, they may not offer you a policy.
Second, a lower credit score can cause you to pay more for your car insurance. As you can see, your credit score is part of your risk profile, and if you are seen as someone who may not be paying their premiums, you will be considered a higher risk. People who are more likely to be covered, usually pay higher premiums.
And third, dum dummmmmmm…if you don’t pay your car insurance premiums, you will default on your debt and that will lower your credit score, which can put you in a more difficult financial position. This is not how you want your story to go.
Here are some things that can negatively affect your credit score:
- Missing monthly payments.
- Late payment of monthly installments.
- You often apply for credit.
- Your credit utilization is constantly rising.
- There is a judgment against you.
- Declaration of bankruptcy.
Hi, if you are insured by King and things are too tight to manage your premiums and are considering canceling outright, please contact us. Canceling your insurance is very risky and we want the best for you. always.
How do you know your credit score?
Fortunately, it is easy to obtain your credit report. You just need to visit a website like transunion.co.za where you can download your credit score for free once a year. You can also visit other credit platforms where you can access your score for free, as often as you want, like this one here.
But what good is knowing your credit score if you don’t understand it? We can help you there too!
Simply put, a credit score is a 3-digit number ranging from 0 to 999. The higher your score, the better your credit rating.
Here’s how to understand credit scores:
- 0 – 486 = Poor
- 487 – 526 = unfavorable
- 527 – 582 = below average
- 583-613 = average
- 614-680 = appropriate
- 681 – 766 = good
- 767-999 = Excellent
Well, can you improve your score?
The good news is that you can totally improve your credit score. It’s possible! For example, you can catch up on overdue accounts, pay your revolving credit balances, avoid applying for new accounts and never miss payments.
Again, if you find yourself in a very bad financial situation and pressure is on you, before you miss out on a payment or cancel your policy altogether, please contact us.
Our goal is to provide affordable auto insurance and help you avoid bad accident situations and don’t have us shield you from those costs.
Call us on 0860 50 50 50 or click here so we can call you back. Together, we can work this out.