Have you ever wondered just why you seem to pay more insurance than your friends and family? Why is it that you can buy a cheap car, with no modifications, yet your insurance is through the roof? The answer may surprise you.
It’s a fact that the type of car will affect the premiums you pay, as will any modifications you make, and the age of the driver/s. This is common knowledge, and there isn’t much you can do about it apart from choosing a different, unmodified car. But many people don’t realise that there is one factor which can adversely affect the premiums which actually has nothing at all to do with your car; your credit score.
More frequently, insurance underwriters are turning to the credit reference agencies Experian and Equifax to help them decide what premium rates to quote applicants. This is increasingly bad news as the country dives deeper into debt because of the credit crunch. More people are missing repayments on bills, loans and mortgages which is showing up as black marks on credit files, and of course this is being relayed back to insurers resulting in higher premiums. This has the knock-on effect of less spare money to pay for bills
About the author
J Tillotson is a financial author in the UK