A recent article by NerdWallet examined the effect of high credit scores and auto insurance rates1. In our home state of Illinois, citizens with poor credit scores will pay on average $830 more each year in premiums. The ‘poor credit score penalty’ will vary by insurer so it may pay off to get several quotes when looking for coverage.
This ‘poor credit score penalty’ highlights the need to effectively manage your cash flow in order to avoid late payments and to limit the use of revolving debt (e.g. credit cards). As a part of our comprehensive financial planning service a review of your auto insurance is available upon request. We are happy to examine the premium, deductible and limits in light of your overall financial situation to look for opportunities to increase your protection and/or reduce the cost.
It is also a good reminder to monitor your credit report. You can obtain a free credit report every year at AnnualCreditReport.com.
1Glenn, Alex. May 24, 2017. “Drivers With Poor Credit Pay Higher Insurance Rates in Most States”. Retrieved from nerdwallet.com