Insurance Score - What it Is, How it Affects Your Auto Insurance Rates and How to Make it Serve You

By Chimezirim Chinecherem Odimba

Do you know what your insurance score is? Do you know what affects it? Do you know how it's used to determine what you pay as rates? Do you know how to adjust it to your advantage? This article will help you with all these questions...

First let's define the term...

According to the Insurance Information Institute it is "a numerical ranking based on a person's credit history." Studies have shown a correlation between the way a person manages his/her finance and their likelihood of filing a claim.

Those who have poor scores are statistically more likely to file claims. Therefore, this makes it rather clear that the better a person insurance score is, then the cheaper their rates will be all other things being equal.

Furthermore, since this score is based solely on a person's credit history, it goes to say that to get a better score, one needs to take steps to improve his/her credit rating.

Steps to improve your credit rating...

1. Pay your bills on time. Never miss payments. These will affect your credit rating negatively. That's apart from the facts that you'll have to pay more as interest and that your creditor might be compelled to increase your interest rates due to the risk involved in lending to you.

2. Check your credit report yearly and make sure you correct any errors you find.

3. As much as possible, use only a few credit cards.

4. Make sure you do NOT use more than 30% of your available credit at any point in time.

So what else can you do to get cheaper insurance rates?

Much as most (If not all) insurers use your insurance score to determine your rate, they do NOT all give it the same relevancy score. Remember, there are many other factors that are used to determine a prospect's risk or otherwise to an insurer.

Furthermore, different insurers target different markets and as well have different loss histories among other things. This simply means that you'll get different quotes from different insurers.

Therefore, to get the best rate quote, make sure you get and compare quotes from a wide range of reputable insurers.

Here are great pages for auto insurance quotes. InsureMe Auto Insurance Quotes Auto Insurance Quotes Chimezirim Odimba writes on insurance.