Auto Insurance Louisville KY Serving Louisville for Over 35 years!
(502) 933-2255 | (800) 468-1215
Auto & Home

Credit ratings basically give a history of how well you have been able to pay your bills. Many insurance companies especially those concerned with vehicles do use these ratings in determining the premium rates though this is not the only factor. In fact, many will also ask for other personal information. If we may take a car insurance company for example, they will use ones age, type of the car, driving history, and where one lives in addition to the credit ratings to determine insurance rates. However, the methods of determining the rates differ from one insurance company to another.

Will My Credit Rating Affect My Insurance RatesSince there are no fixed laws governing the insurance companies on how to determine the rates across the board, different states have their own laws that govern their insurers. Due to this, many companies comply with their laws and weigh their customers using different scales to come up with individuals’ rates.

Although a number of insurance companies may be using this credit score to determine ones insurance rates, sometimes low credit scores do not necessarily lead to high premium rates. Other factors such as those mentioned above do play a major role in addition to insurance risk scores. The insurance risk scores are very similar to the credit risk scores that are used by lenders to determine whether or not to give one a loan since the two use ones credit information.

These insurance risk scores don’t focus more on what you pay or what you owe but mainly look at how regularly you pay. They are usually dependent on five characteristics of a person’s credit information that helps in weighing the person. They comprise of; types of credit established, payment history, length of time credit has been established, amount of credit owned and the new credit.

The insurance risk score is used by the insurance companies to identify reliable and consistent consumers who are less likely to claim policies and hence likely to cost the insurance less money. We can therefore agree that insurance company’s use a complex mathematical procedure in determining the premium rates of which credit rating is a factor of the equation.

By Matt Reynolds - Google+
Share |

No Comments

Post a Comment
Required (Not Displayed)

All comments are moderated and stripped of HTML.
Submission Validation
Change the CAPTCHA codeSpeak the CAPTCHA code
Enter the Validation Code from above.
NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive

View Mobile Version
  Connect With Us: Social Social Social Social Social
Site Links

Get A Quote
Our Companies
About Us
Contact Us

Claude Reynolds Insurance Agency, Inc. BBB Business Review

Louisville Auto Insurance Review

Icon Visit Us

Claude Reynolds Insurance Agency Inc.
6801 Dixie Hwy Suite 232
Louisville, KY 40258
Phone: 502-933-2255
Fax: 502-933-5057
Map & Directions
Claude Reynolds Insurance Agency Inc. | 6801 Dixie Hwy Suite 232, Louisville, KY 40258 | 502-933-2255
Powered by Insurance Website Builder | Online Marketing by One Thing Marketing