A new study from CarInsurance.com found those with credit scores above 750 save on average $783 annually on car insurance.
The website noted that 40% of the population has credit scores above 750, which are considered excellent scores by many.
They added that the average credit score is roughly 680, so many drivers are paying a premium for their car insurance.
Even those with 750 scores could see some improvement, given the fact that the popular consumer Fico score range goes all the way up to 850.
So what about those with less-than-stellar credit?
Well, the average young driver between the ages of 25 and 34 with a clean driving record, full coverage auto insurance, and a credit score over 750 pays $1,155 annually for car insurance.
Meanwhile, similar drivers with credit scores of 650 to 749 pay an average of $1,658 and those with credit scores between 500 to 649 pay $2,023.
If you don’t even have a credit score, thanks to insufficient data, you’ll be looking at an average insurance premium of $2,182.
(The average premium for all drivers age 25 to 34 is $1,938.)
The numbers are pretty similar in other age brackets as well, meaning credit score is a major driver of car insurance rates.
So instead of focusing simply on your choice of vehicle and desired coverage, get to know your credit score long before shopping for car insurance.
After all, you could save thousands of dollars over your lifetime.
The same goes for other types of financing, like getting a mortgage. A poor credit score will not only lead to a higher mortgage rate, but could even crush your dream of owning your dream home!Powered by Sidelines