The Role of Credit Scores in Determining Georgia Auto Insurance Premiums 

If you’re wondering about credit scores and Georgia car insurance, you’ve come to the right place. Perhaps not surprisingly, your score can, in fact, affect the premium you will pay for your auto policy. While some states do restrict this information (looking at you, California!), Georgia is not one of those states. So, when you’re shopping for a new policy or looking to renew your current one, you should be aware of how you can improve your score to secure a better premium when you’re shopping for car insurance quotes in Georgia. 

This guide will show you how it’s done! 

The Intriguing Connection Between Credit and Georgia Car Insurance Rates 

Does your credit score affect auto insurance rates? Think about it for a moment. What does your score really say about you? From an insurer’s perspective (or a credit card company’s or a mortgage underwriter’s — you get the drift), this score is a measure of your responsibility and willingness to stay on top of your responsibilities. 

In general, while publicly available information isn’t exactly clear-cut, you can expect to enjoy a discount compared to the average Georgia car insurance premium if you have a decent score. On the other hand, if you have a bad score, you might end up paying more than the average. 

Car insurance for bad credit in Georgia doesn’t have to be impossible to find, of course. Keep reading to find out how you can find a policy that makes sense for your financial situation while also working toward rebuilding your payment history. 

What Is a Credit-Based Insurance Score? 

Unlike a regular score (such as a FICO score, which focuses on predicting loan repayment behavior), a credit-based insurance score is designed to correlate with the frequency and severity of future insurance losses. 

So here’s the thing: Insurers hire these smart mathy types known as “actuaries” to figure out how to correctly price a policy (of course, they don’t really do this with individual policies, but instead devise algorithms to compute these prices at scale). They’ll be especially interested in your payment history (if you pay your bills on time, in other words), how much debt you’re carrying, the types of credit you utilize, and other factors that typically come with FICO and Vantage. 

There’s a statistical correlation between poor credit car insurance premiums and ability to pay, unfortunately — and that’s why companies make use of these scores in the first place. Georgia car insurance rates use this extra data point alongside more traditional ways of pricing these products, like type of vehicle and residential address. 

How Much Does Your Credit Rating Affect Insurance Rates in Georgia? 

Again, it’s impossible to say for sure how much your payment history rating affects what you pay for your car policy in Georgia. That’s because insurers have zero interest in providing this type of information to the general public since it might clue their competitors into how they price their products (and possibly cause them to lose a marketplace advantage). 

However, based on anecdotal research, it does seem that there is a modest effect in both directions: Good scores lead to lower premiums, while bad scores lead to higher premiums — it’s one of those reasons why your car insurance might be high. This correlation could also be due to the fact that drivers who have bad scores may also have other bad habits, such as a tendency to drive without proper coverage, an inability to keep up with financial responsibilities, and possibly even criminal records in some cases. 

Toolbox for a Better Credit Score and Insurance Rates 

So, the question becomes: How do you get better Georgia car insurance rates if you have a bad payment history? It is, after all, one of those surprising factors that may influence your rates. There are entire books written about this topic, but there are some basic ideas you can get started with today if you have the time and the inclination. Here are a few of the most effective strategies: 

• Monitor your credit. Check for errors, fraudulent accounts, or outdated negative information. You’re entitled to one free report annually from each of the three bureaus (Equifax, Experian, TransUnion). 

• Pay bills on time. Payment history accounts for 35% of your FICO score. 

• Reduce balances. Keep your credit utilization ratio below 30% and ideally under 10%. 

• Avoid new hard inquiries. If you open too many accounts in too short a time, your FICO will get dinged. (These are known as “hard pulls,” and creditors will let you know if they’ll do them or not). 

• Use credit-builders. Things like secured cards, certain types of personal loans, and products like Experian Boost can help you achieve better credit scores. 

Get a Fair Rate in Georgia – Explore Auto Insurance with Velox 

At the end of the day, your credit scores and Georgia car insurance are related. But luckily for you, we’re here to help at Velox. In addition to our affordable policies, we can also work with you to help you build your credit while not breaking the bank on your premiums. 

Get started today with an online quote, give us a call at (855) 468-3569, or visit one of our many offices in Georgia to speak with an agent in person!