Your insurer will expect you to pay for your car insurance policy. If you don’t, that usually gives them the right to suspend your coverage. Many insurers will take a good look at your reliability to pay when you sign up for coverage.
Insurance companies weigh a lot of factors when determining how much you pay. Among these might be your credit score. Surprisingly to many drivers, your credit score might affect your policy premiums. Drivers with poor credit might wind up paying more for their policies.
Poor Credit and Premiums 
Most car insurers base premiums on how much risk an insured party might pose to the company. A driver’s risk is how likely they are to be a reliable customer, or how often they might file a claim. Drivers with the lowest risk levels often pay the lowest policy prices. By contrast, drivers with higher risks often cost more money to insure. For example, if you have had a lot of car accidents, that means you might make a lot more claims. This might force the insurance company to pay you more frequently. Therefore, the insurer might have to charge you more because you are more of a drain on them.
So, how does bad credit affect car insurance rates?
If you have bad credit, it usually signals that you might have a hard time paying bills and staying out of debt. This might show your insurer that you could fall behind on your payments. Most insurers don’t want to offer policies to unreliable customers. Therefore, low credit might mean they cannot insure you.
Another idea to think about is what bad credit means following an accident. Research has shown that those who have poor credit might be more prone to have accidents. As such, they might pose an additional risk to insure.
Improving Your Credit
Your credit history isn’t the only factor that will determine your policy premiums. However, it’s one factor that you might be able to control. If you improve your credit, you might be able to decrease the premium price you wind up paying.
Work hard to maintain your credit standing. Pay off your debt, and don’t carry too many lines of credit from various sources. Check your credit score annually, and talk to your financial advisor on ways to improve your spending habits. With a little attention, you can soon be well on your way to a secure financial future.