Nearly all insurance companies use credit scores, both to decide whether or not to approve you for a plan, and to decide what you will pay every month. Credit is not all that is evaluated however, and you’re not completely lost if you’ve ever missed a payment or borrowed a lot of money at once. With a poor credit score, however, it is likely that some companies will deny your application.

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Besides credit, car insurance companies also evaluate your education level, and even your professional career when deciding whether or not to issue you insurance, and when calculating your “insurance score,” which will directly affect your insurance premium. Customers with high credit scores and high insurance scores will receive lower premiums and lower interest rates. Other factors besides your credit and education affect your score, of course, including your accident and ticket records, your age, and even whether you are a man or a woman.

What You Can Do

The first thing you can do understand and work with your credit score is to be knowledgeable of where you stand. You can visit to request your score for free. However, be wary of sites that offer your credit score and ask for personal information and are not government sites.

Once you know your score, here’s what you can do. If you are aware that your score is lower than you’d like, before applying for insurance, try to borrow as little money as possible for a while. Work towards being a responsible consumer and improving your credit score. Make sure that all your chickens are in a row for at least what you do owe — you’ve had no outstanding payments for the past several months, as banks and others may not report your payments until a few months later. If possible, try to get your borrowing rate below 30% of your credit limit.

In order to improve your credit score over the long run, avoid borrowing over 30% of your borrowing limit on credit cards. If you ever make a late payment for whatever reason, make sure that it is not so late that the person or company you owe sends your account to a debt collection agency. Try to avoid foreclosure. If for some reason there is a mistake or you feel that your credit has been unfairly damaged, you might try legal action. Be persistent, find out why a company may have rejected your application, and then figure out exactly what you can do to pay off your accounts and improve your score.

Remember that your credit score is not forever, but by being a responsible customer you will save a lot of money in the long run and also have a much easier time dealing with financial institutions of all types. Good luck, and remember that you can improve your score over time by being responsible.

Mark McCrell loves to write about all things auto and drive around in his 1975 Buick LaSabre. He currently blogs for, a website that provides free car insurance quotes.