When people apply for auto insurance in Baton Rouge, LA, their credit history often affects both premiums and the likelihood of acceptance. This means that your track record of on-time and/or late payments could influence rates. The same goes for any bankruptcies, defaults or foreclosures in your past.
Some Louisiana drivers wonder why this information matters. After all, the insurer isn’t providing a loan. Insurance companies believe that a person’s financial history helps reveal how likely he or she is to file a claim. Insurers may also consider it important because a policyholder with a high score is more apt to pay premiums on time.
An insurance provider may assess specific credit history data. However, numerous companies save time by only checking scores. The most commonly used rating is known as a FICO score. This number grades a person’s payment history based on an assortment of factors.
Major events like foreclosures and bankruptcies have the most significant impact on this score. Collection accounts also have a substantial effect. Other important factors include the average account age, account types, debt level, lateness and frequency of credit inquiries. It’s also crucial to consider the percentage of a borrowing limit that you’ve used.
Your credit report may be blank if you haven’t used any loans or charge cards in many years. The same goes for people who divorce. This frequently results in moderately higher premiums. Nonetheless, it probably won’t raise your coverage costs as much as a largely negative history.
Cordell Insurance serves motorists in Baton Rouge, LA and the surrounding area. We have provided customized auto policies at competitive prices for more than 36 years. Our staff helps drivers compare coverage from numerous major insurers. To get started, please call Cordell Insurance at 225-767-8840.