Find out about auto insurance companies which do not use credit score for underwriting your rates.
Most companies, if allowed by your state, will use your credit score for car insurance underwriting. For example, AllState and USAA etc do not provide no credit check auto insurance and be prepare to pay a lot more for insuring your car or truck if you are caught in financial hardship and have a lot of personal debts. So even if you are a careful driver with no accidents or traffic tickets over the past 5 years, you may still end up with bad credit car insurance for not paying your monthly credit card balls on time.
Buy Car Insurance With Credit Card Installments
Luckily, there are still major car insurance companies such as Progressive which only use credit check for drivers who want to buy car insurance with credit card installments. If you are willing to pay for the policy in a single up front payment, they will waive the credit check and even give you a discount car insurance rate as a reward.
As more and more auto insurance companies uses credit scores to calculate insurance rates, many consumers are shocked they need to pay more even when they have never made an accident claim or received a speeding ticket. For those with very bad credit, auto insurers may even decide to cancel or deny coverage renewal so you better be prepared to check whether no credit check auto insurance is a suitable option for you.
Another confusing problem is the issue of having no credit. Like bad credit, you can be asked to pay more for auto insurance for no credit because you are also considered as non standard. This usually affects students and young drivers since they have yet to establish any personal credit history of their own. Luckily, it is easier to build up your personal credit from a clean sheet, then to fix bad credit. Once you open one or two credit card accounts and make regular payments, you will be able to get credit established and qualify for cheaper car insurance with no money down.
Why Auto Insurance Companies Check Credit
The insurance industry states that there are statistics on credit ratings and insurance claims that show a strong correlation between the likelihood of making accident claims when you have poor insurance credit score. In fact, they are hinting that the risk of committing insurance fraud is very high when you have bad financial stability and personal credit.
This accusation is not directed towards you, but you can only blame other drivers in this category who have tried to get away with exaggerated insurance claims in the past. If you do not want to pay grossly increased rates for bad credit car insurance, do your best to fix any debt and credit problems fast. If you have good FICO score above 700, you will be rewarded with cheaper car insurance rates with no down payment required.
Companies That Offer No Credit Check Auto Insurance
You can find companies that offer no credit check auto insurance, although that may not be in the best of your interest. By getting accurate information on your credit history and driving records, insurers can underwrite your policy at a fairer cost after predicting the risk of future claims. There is no reason to believe that these for-profit insurance companies will be assuming you have perfect credit ratings and provide you with the cheapest rates for car insurance with no credit check. The reverse is more likely to be true – that is they assume you have very bad credit but still issue you with proof of insurance at a higher price.
According to the Federal Trade Commission (FTC)’s Fair Credit Reporting Act (FCRA), you can get a free copy of your credit report which records how you pay your bills, bankruptcy, late payments, CCJs, etc. You need to keep an act on your personal credit because many businesses are using it to review your applications for loans, employment, insurance, etc.
Guaranteed Issue No Credit Check Auto Insurance
However, some drivers prefer to approach insurance companies that offer guaranteed issue no credit check auto insurance because of the minimal delay. If you are worried of being declined from coverage by normal providers, you can choose to get free quotes from one of those companies as recommended by your state’s motor insurance department.