Car insurance providers take into account a variety of factors when deciding how much to charge you for cover. For instance, they take into account things like your age, where you live, how many miles per annum you travel in the car, what you do for a living, the make and model of the vehicle being insured, the level of cover and your driving history i.e. do you have any motoring convictions.
You could end up paying more for your car insurance if you have a poor credit rating.
Another factor that some insurers may utilize when calculating the premium they are going to charge you for providing the cover is if you have a poor credit rating. So, why is this?
Well, according to Tesco’s website, from a statistical point of view, more insurance claims are likely to be made by those motorists who are unfortunate enough to have a poor credit rating. Therefore, presumably, if this is the case then a driver with a bad credit history is going to be asked to pay more for the cover than if they had a good credit record. It is interesting to see just how many factors an insurance company uses when deciding how much you will have to pay in premiums each year to insure your car.
Another occasion when a motorist with a poor credit history may receive a higher quote than if they had a satisfactory credit rating is if he or she wishes to pay for their motor insurance by making monthly payments. Many insurance companies charge more for providing the cover in this situation as, to all intents and purposes, you are borrowing the amount to pay for the cover from the insurance company as a result of which interest is often charged by the insurer. If you have a poor credit history then the interest rate the insurance company charges may be higher than if you have a good credit record.
