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Credit check for car insurance
17 Nov 2017

Credit check for car insurance

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If you are looking to buy car insurance or to switch to a new auto insurance provider in the near future, you may not realize it, but your credit score will often have an impact on how high of an insurance premium you pay from month to month.

In fact, in extreme cases, poor credit might even get your policy canceled or prevent you from being approved for car insurance at all at a particular company.

It may not be fair, but this is how many auto insurance companies operate. Thankfully, however, not all of them use credit scores as an “all-encompassing gauge of responsibility” or run a credit check for car insurance rate-determination purposes.

Why use a credit check for car insurance?

A credit check for car insurance may not seem to make much sense. After all, the fact you had financial troubles sometime in the past 10 years doesn’t mean you are going to get in a car accident, file lots of claims, or commit insurance fraud.

But insurers nonetheless often correlate the two and notice that people with lower credit scores are more likely, on average, to do all of those things.

To be sure, if insurers were to investigate other categories, like people who’ve been arrested, who drink alcoholic beverages, or who are simply poor, the same kind of correlations could be made and rates hiked on that basis. But they use the credit score because it’s readily available information and already accepted as a standard for determining loan rates and premiums on other types of insurance like life, health, and homeowners.

So, it’s not fair, but yet, that’s how it is in many cases. But can you find car insurance no credit check needed? At Bonsai Finance, we can help you do just that.

Why offer car insurance no credit check needed?

The other side of the coin, and the other side of the car insurance market, is car insurance no credit check and no credit-score based rates.

But if some auto insurers are so confident they need to use credit scores as a gauge, why are others not? The answer is several-fold:

  • They realize that paying back loans on time is not the same as buying an insurance product and thus not especially relevant.
  • They know they can offer competitive rates and gain customers who don’t want to pay higher car insurance rates based on credit scores.
  • They understand that people with struggling credit scores don’t want extra credit checks run since that could hurt their credit scores yet further.

At Bonsai Finance, we can help you find an insurer who offers reasonable rates and who will not run a credit check or base your rates on a credit score. We have found many past customers their best possible auto insurance company, and we stand ready to do the same for you.

The process is simple, quick, and only requires minimal personal and financial information. And Bonsai’s customer satisfaction rate is extremely high.