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Many personal auto insurance companies consider your credit information when determining how much premium to charge for your insurance. So if you are calling around for new insurance, keep in mind that many insurers are looking at your credit history. I hope that we will be able to let you know why and how they do this.

The reason that some insurance companies use credit information is because they feel there is a direct correlation between consumer’s credit history behaviors and expected claims that may occur. Therefore, they feel that people with better credit behavior are less likely to severe insurance losses.

Many insurance companies still use your age, driving history, type of vehicle, where you live in determining how much you should pay for your insurance. Therefore, if you have not established a credit history yet, the companies that use credit history may not be best for you. They may not allow you to be eligible for certain discounts, which could result in higher premiums.

The companies that do use credit scoring will still use other factors in determining your premium. They will also use your age, driving history, type of vehicle, where you live in determining how much you should pay for your insurance.

Is it fair for an insurance company even look at my credit information without my permission? The answer is yes. The Federal Fair credit-reporting act says “Reasonable procedures. It is the purpose of this title to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information in accordance with the requirements of this title.” This can be found at http://www.ftc.gov/os/statutes/fcra.htm

If you feel that your credit history is better then the insurer can find, make sure the insurer has your correct name, address, social security number, and date of birth.

Some insurance companies will look directly at your actual credit reports when determining your rate, however most will use what is called an “insurance credit score.” An insurance credit score is developed by using statistical techniques and methods to predict the likelihood a consumer will have a higher than anticipated losses. These are similar to what lenders use to predict the reliability of an applicant repaying a loan.

Insurance companies use many factors in determining your credit score. Here are some examples of those factors:

. Public records: bankruptcy, collections, foreclosures, liens, charge-offs, etc.
. Past payment history: the number and frequency of late payments and the days between the due date and late payment date.
. Length of credit history: the amount of time you have been in the credit system.
. Inquiries for credit: the number of times you have recently applied for new credit, including mortgage loans, utility accounts, and credit card accounts.
. Number of open lines of credit: the number of credit cards, whether you use them or not.
. Type of credit in use: major credit cards, store credit cards, finance company loans, etc.
. Unused credit: how much you owe compared to how much credit is available to you.

Your insurance credit score may differ from company to company, as they will use different factors in determining your premium. Notice that we call it an insurance credit score. This means that it encompasses many factors including credit.

Since each insurance company uses different techniques to determine your credit score it is hard to tell you what a good credit score is. Usually a good credit score will result in lower premiums.

Your agent or company is not obligated to tell you your credit score. In fact, they might not even know what it is. All they usually know is that your credit score qualifies you for a specific rate or policy. Some companies also offer better rates under each qualifying tier.

If you feel that there is incorrect information on your credit report, you should tell the credit bureau. If you report and error, the credit bureau must investigate the error and get back to you within 30 days. You can ask the credit bureau to send a notice of the correction to any creditor or insurer that has checked your file in the past six months. Once the errors are corrected, it is a good idea to get a new copy of your credit report several months later to make sure the wrong information has not been reported again.

The three national credit bureaus are:

. Trans Union (www.transunion.com or 800-888-4213)

. Equifax (www.credit.equifax.com or 800-685-1111)

. Experian (www.experian.com or 888-397-3742)

Tell your insurance company. Do not wait until the credit bureau investigates the errors to contact your insurer. Tell your insurance company right away and ask if the errors will make a difference in your insurance. If the errors are big, tell your insurer that you are disputing the information and ask if they will wait to use your credit information until the errors are corrected. Small errors may not have much affect on your insurance credit score. If the errors are big, it can make a significant difference in your premium. Some companies are unable to adjust the premiums until the score is corrected, but it does not hurt to ask.

If you have taken the steps to improve your credit, score you should ask your insurance company to re-evaluate your credit score at renewal.

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Jon Register is a representative of CarInsurance.com. You can visit CarInsurance.com at http://www.carinsurance.com or contact them at 1-877-327-8728.

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Getting a car loan in New York can be tricky if you do not follow the steps in the right order. One thing that you need to be aware of especially is the fact that before you can get a car loan in New York, you will need to show proof of auto insurance. It may seem like putting the cart before the horse, but in New York, you pretty much need the car insured before you can actually buy it. This is because if you purchase a car with a loan, New York law requires the dealer to handle the titling and registration for you. And before you can register your car in New York, you have to have proof of insurance.

Be aware that when the dealer handles all of the necessary steps to getting your registration and titling, many of them will charge you the additional fees above and beyond the amount of your loan. Some will roll these charges into your car loan, and others will allow you to arrange to pay the expenses out of pocket.

Here are some other steps to follow when getting a car loan in New York:

1. Shop around for the best interest rates on your car loan. Dealers usually do not have the best interest rates. You can usually get a better rate from a bank or credit union.

2. If you are responding to a special financing offer in an ad, bring the ad in with you to show the dealer. If you have poor credit, you are not likely to get the advertised rate, but you might be able to negotiate a lower rate than the dealer is initially willing to give you.

3. Don’t pay more for a factory-ordered car than for one already sitting on the premises.

4. If you get a car loan to buy a vehicle from a private seller, be aware of the needed documents you will have to submit to have the car property registered:

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Car insurance in the United Kingdom is an important and compulsory part of the motorists ongoing motoring cost and when buying a car you should allow for this cost as it can be quite an expensive amount depending on the individual.

It should be noted that although I am writing this as a car driver in the United Kingdom most of the factors taken into consideration for calculating a car insurance premium are fairly standard worldwide procedures and will apply to you as a car driver where ever you may live throughout the world.

There are many factors that are taken into account by the car insurance company when evaluating what premium they will charge you for your annual insurance cover.
Some important facts to the total insurance premium you will pay for your car insurance premium are your age, your sex, past motoring experience and occupation.

An individuals age is one of the most important factors in calculating a car insurance quote as proven statistics held by the insurance companies show evidence that in general younger drivers are more likely to be involved in an accident compared to an older driver.

Also it is certainly proven that female car drivers are less likely to be involved in an accident and therefore cost the insurance company less payout compared to a male driver.

Past motoring experience such as the number of years you have been driving without being involved in a car insurance claim and without receiving police endorsements for car related incidents such as driving without insurance, driving whilst under the influence of alcohol or drug substances, dangerous driving or speeding is also another major factor in the car insurance quote process.

When first obtaining your car insurance quote whether online or offline it is of the utmost importance to provide the car insurance company with all the relevant facts regarding your motoring history as this is the basics upon which your car insurance premium will be based and if accepted by you will be the information written down on the car insurance proposal form, this proposal form is the legal contract between you and your car insurance provider and is signed by you stating that all the facts you have provided are correct.

You will find that by obtaining car insurance quotes from several car insurance companies that your annual premium can be vastly different from company to company and therefore it is in your own interest to shop around to find which one suits you best, always bearing in mind to find out not only the annual car insurance premium but also what cover is provided by the car insurance company for your money.

Copyright 2006 Terry Till

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