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May 24, 2021

Do All Auto Insurance Companies Consider Credit History?

Insurance companies consider many things when calculating car insurance premiums. Each factor is used to evaluate how likely you are to file an insurance claim. A driver who is more likely to have an accident usually has a higher premium. side view of red car

What is a High-Risk Driver? 
A high-risk driver is a driver that insurance companies see as most likely to file an insurance claim. You may be considered a high-risk driver if you: 

  • Have poor credit 

  • Have a poor driving record with multiple violations 

  • Have an SR-22 

  • Are younger than 18 years of age 

  • Drive a sports car/expensive vehicle 

Purchasing car insurance when you’re considered a high-risk driver isn’t impossible, but it is difficult and often expensive. Some insurance agencies don’t insure particularly high-risk drivers, and the ones that do charge a lot for premiums to balance out the risk.  

How Far Back to Insurance Companies Look? 
When it comes to previous claims and your driving record, insurance agencies typically look two or three years back. On credit scores, they could look as far back as seven years, though the most important score is your current one at the time you purchase a policy. 

Does Paying Car Insurance Help You Build Credit? 
Unfortunately, you can’t build credit by paying your car insurance bills. While car insurance doesn’t help you build credit, it also doesn’t hurt your credit. Your credit score shouldn’t go down if you miss a payment. 

To build your credit, you must make timely payments on credit cards, student loans, car loans, lines of credit and mortgage loans.  

Other Effects on Your Car Insurance Rates 
Other important factors on car insurance rates include: 

  • Driving record 

  • Location 

  • Value of the vehicle 

  • Age and gender


Drivers who reach the age of 25 should see a substantial drop in their insurance rates. Men also tend to pay more for car insurance as they’re statistically more likely to participate in aggressive driving behaviors. 

Certain locations charge more to insure vehicles as well, especially areas with a high rate of car wrecks of locations close to major highways. The cost of living in the area can also affect your car insurance rates, as accidents in expensive areas may be more costly than in areas with a low cost of living. 

Perhaps the biggest influence on your car insurance rates is your driving record. Most violations stay on your record for about three years, depending on your location. Other violations, can last up to 10 years.  

Look for discounts such as Good Driver discounts, Mature Driver discounts, Good Student discounts, bundling policies with home and auto, and more. 

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