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, something our digital gurus picked up on, is that more and more people are looking online to see if getting a car insurance quote will affect their credit score.
It makes sense to research this as your credit rating affects many important areas of your life such as: B. whether a bank will approve your home loan application. As for the bank, your credit rating tells you how much risk you’re taking. If you have a good score, you are more likely to get the loan and buy your dream home.
But we digress. You want to find out if getting a car insurance quote will affect your credit score.
What’s the answer?
The simple answer is no. Getting a quote for auto insurance will not affect your credit score at all. However, it must be said that insurance companies use a number of factors to assess your risk and determine whether they will give you a policy, as well as the premium you will pay.
These factors include things like your car’s age, make and model, as well as your age, driving habits and… your credit score.
Wait, how does your credit score affect your auto insurance?
While getting an insurance quote doesn’t affect your credit score, your credit score could affect your auto insurance in three ways.
First, your credit score is a pretty telling indicator, and even an indicator of your financial behavior. It tells an insurance company how likely you are to pay (or not pay) your bills and gives them an idea of whether you’re a reliable policyholder. If they think you cannot meet your obligations, they may not offer you a policy.
Second, a low credit score could make you pay more for your auto insurance. You see, your creditworthiness is part of your risk profile and if you are viewed as someone who may not be paying your premiums then you are classified as a higher risk. Those who insure a higher risk usually pay higher premiums.
And third, dum dum dumbmmmmmm… If you don’t pay your auto insurance premiums, you’ve defaulted on your debt and this will cause your credit score to decline, which could put you in an even worse financial situation. This is not how your story should go.
Here are some things that could negatively impact your credit score:
- Missing monthly payments.
- Delay in monthly payments.
- Frequent credit inquiries.
- Your credit consumption increases continuously.
- have a judgment against you.
- be declared bankrupt.
Hey look, if you are insured with the king and things are getting so tight that you can no longer manage your premiums and are thinking of canceling, please get in touch with us. Canceling your insurance is very risky and we want what’s best for you. Always.
How do you know your credit score?
Luckily, getting your credit report is easy. All you have to do is visit a website like transunion.co.za where you can download your credit score for free once a year. You can also visit other lending platforms where you can access your score for free as many times as you want like this one.
But what’s the use of knowing your credit score if you don’t understand it? We can help you there too!
A credit score is simply a 3-digit number ranging from 0 to 999. The higher your score, the better your credit rating.
How to understand credit scores:
- 0 – 486 = Bad
- 487 – 526 = unfavorable
- 527 – 582 = below average
- 583 – 613 = average
- 614 – 680 = Inexpensive
- 681 – 766 = Good
- 767 – 999 = Excellent
Right, so can you improve your score?
The good news is that you absolutely can improve your credit score. Yes, it’s possible! For example, you can catch up on overdue bills, reduce revolving credit balances, avoid applying for new accounts and never miss any payments.
Again, if you are in a pretty bad financial situation and the pressure is getting to you then please get in touch with us before you miss a payment or cancel your policy altogether.
Our goal is to provide affordable car insurance and to help you avoid an awkward situation where you are involved in an accident and we are unable to protect you from those costs.
WhatsApp us on 0860 50 50 50 or click here so we can call you back. We can work this out together.