Car Insurance in California

The reason that the companies who sell car insurance in California use your credit is due to the analysis of millions of policyholders. It was found that people with poor credit usually made bigger and more frequent claims than those with good credit. And insurers now use your credit to help them set rates and in some cases to decide whether to issue you a policy at all.

Car insurance companies use your credit to help give them a picture of how responsible you are. And if you have no credit when you apply for car insurance in California, unfortunately insurers will tend to treat you as if you have bad credit. Simply because they lack the information that a credit record gives them, they'll consider you a higher risk.

When you apply for car insurance in California, the insurance companies use your credit to get an overall view of you. To do this they typically use a credit score which rates your entire credit record. Your age, sex, marital status and income aren't a part of the score. It usually rates such things as your your bill-paying history, the age and number of your credit accounts, the size of your total debt and whether you've had any serious financial setbacks.

When you get car insurance in California, the only way to know if and how your credit is affecting your rates is to ask your insurer. They can tell you if it is a problem and suggest ways to improve it. And even if you have good credit, credit records frequently have errors, so it's important to talk with your insurance company to make sure their information is accurate.