A number of states allow insurers to use a driver's credit history as a rating factor to determine premiums and even to provide or deny coverage; consumers with poor histories of fulfilling financial obligations may end up paying more for policies or even find it difficult to find a carrier who will insure them. Although insurers may be allowed to use this information at the time a motorist purchases a policy, it is not necessary to have credit checked when obtaining quotes.
Compare Car Insurance Quotes with No Credit Checks
Comparing the rates of several companies is the most effective way to ensure that the lowest premium is found for automobile coverage; with that in mind, many individuals would feel uncomfortable giving out their social security number to every carrier that they obtain a quote from and have their credit checked to each time they want to compare quotes. Therefore, many insurers will provide a quotation without the need for such information as an SSN or even a driver's license number.
With the majority of states (approximately 40) allowing carriers to use "credit/insurance scores" to rate motorists, the chances are that the cost of auto insurance coverage for a large portion of the nation will be affected by the way they pay their bills and financial obligations. Consumers who choose to shop for policies without providing a social security number will likely be asked by the insurer who they are receiving the quote from to describe their credit situation as poor, average, good or excellent; this is done just as companies ask an applicant about tickets or accidents on their driving record. It is important to answer both as accurately as possible; not doing so can lead to being misquoted or left under the impression that they will be approved for a policy from a company that may actually deny coverage.
When obtaining quotes to compare from, consumers should ask whether or not the companies quoting them will be using their credit history as an underwriting or rating factor; if so ask how it will be used, if will affect eligibility for a policy and how scores affect premiums. Knowing the answers to these questions can help motorists understand why they are being charged a higher price or why they have been denied coverage if credit-related; many states require that insurers give specific reasons why the best rate was not offered or if a policy was not issued.
Consumers should be aware that credit history is only one factor that is used by insurers to determine premiums and issuance or denial of a policy; many states prohibit carriers to deny coverage or raise rates or cancel policies at time of renewal based solely on a motorist's credit scores. Other rating factors commonly used rate drivers, but not to base insurance scores include an individual's driving record, age, gender, marital status, place of residence and the type of vehicle to be insured. Factors that cannot be used include race, ethnicity, religion and income.