February 24, 2016
How to Save on Insurance by Boosting Your Credit Score
Insurance rates are one of the biggest costs that come along with buying a used car in Oklahoma City. They are also one of the most variable. Your insurance rate can change based on your age, job, driving history, and the car you drive. It can also go up or down depending on your credit score. If you want to save money on insurance, repairing your credit is an important step.
How Does Credit Affect Insurance Rates?
Many people don’t know that their credit scores affect their insurance. After all, the two don’t have much to do with each other. Why would your insurance rate change based on your credit?
According to research from the University of Texas, the two actually are related. Researchers found that insurance customers with low credit scores cost insurance companies more than customers with high credit scores do. In fact, the customers with the lowest 10% of credit scores cost companies more than 150% more than average.
This conclusion led to the use of credit scores in most insurance companies’ rate calculations. Along with other information like your job, driving history, age and gender, your credit score plays an important role in the rate you get from a car insurance company.
This means that improving your credit score can actually help you get a better rate from insurers. But how can you get a better credit score?
Steps for Improving Your Credit Score
There are many things you can do to improve your credit score. Here are a few of the best ways to boost your credit:
Fix Mistakes on Your Credit Report
One of the best ways to improve your credit quickly is to fix mistakes and errors on your credit report. To do this, you’ll need to request copies of your reports from each of the three major reporting bureaus: TransUnion, Equifax, and Experian. Each of these companies keeps information on your credit history. You can request one free report each year from each company that shows what information they have for you.
To fix mistakes, you’ll need to look at your report and find information that is inaccurate. Look for things like old accounts that you closed or debts you paid off. If the report does have any errors, you can contact the reporting agency to get the mistake fixed.
Pay Off Old Debts
If you have outstanding debts like credit card debt or delinquent loans, you can improve your credit score by paying them off. Even by making regular payments over time, your credit score can start to rise.
If you have a lot of debt, prioritize the oldest or the most outstanding first. Make sure you always pay at least the minimum payments on all of your debts each month. If you’re having trouble making all your payments, you can also look into debt consolidation to make the process simpler.
Building up your credit isn’t a quick process. Your credit score shows lenders how trustworthy or risky you are with money. A big part of building trust is managing your debt over time. If you can pay off debts, avoid defaulting or negative balances, and keep your accounts in order, your credit score will begin to go up.
For more help managing your credit and rebuilding your score, you can visit us today at The KEY. Our Oklahoma City car dealership offers special financing to low-credit buyers. We understand that you might not be able to wait around while your score improves for a new car. That’s why we offer high-quality cars with flexible financing plans to fit your needs and budget.