People With Bad Credit Pay up to 263% More for Car Insurance — Even if They're Good Drivers
By:
Adam Hardy
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It doesn’t always matter that you’re a safe driver — having a bad credit score can significantly increase how much you pay for car insurance.
The nonprofit group Consumer Federation of America (CFA) recently analyzed how auto insurance companies use drivers’ credit scores when determining their annual premiums. Except for in the few states that ban car insurers from using credit data, the CFA found that insurers tend to charge safe drivers with fair or bad credit scores significantly more than those with good credit scores.
“Across the country, consumers with poor credit annually pay hundreds or even thousands of dollars more for the basic auto insurance coverage mandated by state laws,” the researchers wrote.
