In the State of New Jersey, motorists are required by law to have car insurance. This means if you choose to purchase a car you need to account for the fact you will also be paying for car insurance.
While many people start putting money aside in an effort to be able to pay for their car insurance, what they do not realize is that their credit score can impact the cost they have to pay. That’s right, your credit score and history can impact your car insurance rates.
Auto insurers have their own scores calculated to determine your creditworthiness, as well as how likely you are to file a claim. These scores are credit-based and reflect the measurable relationship between your insurable risk as a car owner and how you manage your financial life.
It is important to note that the score your insurance company comes up with may not actually resemble the exact number of your actual credit score. Auto insurers assign a scoring model to the almost 130 factors that comprise your credit score. Auto insurers are not required to share their score with you but typical factors that shape their number can include:
- Foreclosures
- Collection and late payment history
- Bankruptcy
- Open credit lines and outstanding debt
- Credit history length
- Types of credit being used
It is important to keep in mind that auto insurers are required to make exceptions for extraordinary life events that negatively impact your credit score. These can be:
- Death of a family member
- Temporary unemployment
- Identity theft
- Divorce
- Catastrophic injury or illness
It is also not allowed for auto insurers to utilize factors such as sex, age, ethnicity, religion, income or address in making the calculation.
When it comes down to it, taking care of your credit score can greatly help in getting a good score from a potential auto insurer. Your credit score and history will have an impact on your car insurance rates.
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If you are dealing with debt or trying to get your credit back on track then you should consult with an experienced bankruptcy attorney from the Law Office of Joel R. Spivack Esq. With years of experience, Joel Spivack can aid in your debt relief. Set up a free consultation by contacting our office today at 856-488-1200.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney/client relationship. If you are seeking legal advice, please contact our law firm directly.
