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Many factors impact on our comprehensive insurance premium, one of them is your credit score. It may not feel that’s such important and it won’t really affect on your premium, but you may be wrong. 

Depending on your credit score, you will pay more or less for your comprehensive insurance premium

In this article, we will explore the impact of your credit score on your comprehensive insurance premium and how you can improve it to save money on your insurance.

What is Comprehensive Insurance?

Before we explain the main quesiton, let’s explain what comprehensive insurance is. Comprehensive insurance is acoverage option that will protect your car against non-collision damages like car theft, vandalism, natural disasters (fires, floods, hurricanes, tornadoes, earthquakes), falling objects (tree branches, rocks, debris, hails), animal-related damages (hitting a deer, rodent damage), among others.

What is a Credit Score?

In a nutshell, it’s a 3-digit code between 300 and 850 that is based due your credit reports. Many credit scores are available. However, the most important are FICO and VantageScore. Both companies apply their own calculus.

Factors that will impact on your score the most are paying on time and the credit utilization, or the amount of credit you’re using at this moment. These factors will determine your credit score, and depending on the score you have, your car insurer will consider how risky you will be when offering you a policy.

How Your Credit Score Affects Your Comprehensive Insurance Premium

Insurance companies use your credit score as one of the factors to determine the risk you will perform while driving, and, therefore, increasing or decreasing your comprehensive insurance premium. Some studies show that people with low credit socre will tend to file more claims, and what car insurers are affraid the most, those claims will have higer amounts.

Making them more risky to insure. That’s the main reason why people with poor credit scores typically pay higher premiums than those with fair, good or excellent credit scores.

How to Improve Your Credit Score

It’s not that hard to improve your credit score, and it’s a win-win for you and any other company who take a look on your credit score. In additon, once you improve your credit score, not only your comprehensive insurance premium will decrease, but it can also be beneficial for you in other financial or working areas.

Pay your bills on time:

The most important for your credit score is paying your bills on time. You should set up auto pay or use any sort of reminder to ensure you will never miss a payment.

If for any reason you don’t want to set up autopay, you can use your mobile phone, tap on the calendar located in your phone, then select 1 date in the calendar that will remind you to pay your bills on time. You can also schedule it every 28 or 30 days.

Reduce your debt:

Let’s say you owe some money to the bank, perhpas your balance is in negative or you have a loan. You only have to reduce the debt you have. If you reduce the debt, your credit utilization ratio will improve. This ratio is the amount of credit you’re using compared to the amount of credit available for your finances. You should get that credit utilization ratio below 30%, this way your credit score will improve considerably.

Check your credit report regularly:

That’s something obvious, if you check your credit reports regularly, you will be able to spot errors or fraudulent activities in your bank account, if you spot them all in time, you will fix it immediately, so your credit score will increase. Remember, you can obtain a free credit report every year on the 3 major credit bureaus.

Keep your credit accounts open:

You mau think that those accounts that you’re not using anymore can be cancelled. The problem comes when you do that, your credit score will decrease. You must keep all these accounts open. Specially those with a long credit history, the longest credit history you have to prove, the better to show how responsible you’re managing your finances.


Believe it or not, your credit score will have a huge impact on your comprehensive insurance premium. If you pay your bills on time, reduce your debts, and keep your credit accounts open, your credit score will improve significantly. Making your comprehensive insurance premium decrease. In addition, your credit score will also help you when requesting a loan, finding a job, or sending your children to better middle or high schools.

Other readers were also interested in the following posts:

How Comprehensive Car Insurance and Financing Work Together

How to Choose the Best Car Insurance Payment Installments

When is my car insurance due and what to do next?

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