Should Your Auto Insurance Company Tell You If Your Bad Credit Affects Your Car Insurance Rates?
Over the past few years, consumer advocate groups have been debating over whether or not car insurance companies should be legally allowed to let your bad credit affect your car insurance rates. Opponents of the issue argue that having bad credit does not necessarily make you a bad driver, and that good drivers who have bad credit shouldn’t be put into the same class with bad drivers with bad credit.
Proponents of car insurance companies basing your car insurance rates on your credit score believe that the practice allows the companies to better assess your high or low risk factor. Therefore, proponents further hypothesize that if car insurance companies are allowed to let your bad credit affect your rate, people with good credit will get the lower insurance premiums they deserve for being more responsible than people with bad credit. However, the real question is, how will you know if your credit score gets you a better car insurance rate or not?
FCRA and Your Car Insurance Rate
The Fair Credit Reporting Act (FCRA) implicitly states that you have the legal right to be notified when you are declined for insurance, credit or employment based upon your credit rating. However, FCRA does not clearly state whether or not your insurance company has to notify you if your bad credit results in higher car insurance premiums or the inability to qualify for discounts. Therefore, you might never know if you could be getting cheaper car insurance like other drivers with a better credit rating. That is, you might never know unless you directly ask your car insurance company.
Two States Question the Bad Credit Car Insurance Loophole
Oregon and Arkansas State Attorney Generals have filed lawsuits against a prominent car insurance company for failing to tell their customers that they base consumer’s car insurance quotes on their credit scores. Additionally, five other states have joined Arkansas and Oregon in soliciting nationwide clarification on the bad credit car insurance loophole. Yet, the question still remains as to why car insurance companies are penalizing good drivers with credit problems.
Car Insurance Company’s Premiums
Each car insurance company uses different methods to calculate premiums. That means that one auto company might not base your car insurance rate on your credit, while another auto company might punish you with higher premiums for having credit problems.
Which Car Insurance Companies Let Your Credit Affect Car Insurance Quotes
No one knows exactly when a court ruling will put an end to car insurance companies basing your premiums on your credit score. Therefore, don’t wait another day to ask your current insurer in writing if they are using your bad credit to deny you cheaper car insurance premiums. If they are using your bad credit against you, see if you can find a company that won’t penalize you as heavily for your past mistakes. Use a trusted website like MyCarInsuranceRates.com to shop around for a better deal.
You simply input your zip code, vehicle information, and fill out a brief personal questionnaire. Then, we search numerous reputable insurance companies to find you the best deal on your car insurance out there. Chances are best that MyCarInsuranceRates.com can help you find an auto insurance company that won’t heavily penalize your good driving history with a higher premium just because you have a few unpaid bills. Enter your zip code now to start a car insurance quote and compare rates, policies, coverage, and companies to find the best car insurance.
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