Will Getting A Car Insurance Quote Affect My Credit Score
Introduction
Getting car insurance is important for any driver. It's not just a legal requirement, but it also protects you from financial loss in case of an accident. When you're shopping for car insurance, you might wonder if getting a car insurance quote will affect your credit score.
The Short Answer
The short answer is no, getting a car insurance quote won't affect your credit score. Insurance companies don't typically check your credit score when you're getting a quote. However, when you actually apply for car insurance, the insurance company may check your credit score as part of their underwriting process.
Why Do Insurance Companies Check Credit Scores?
Insurance companies check credit scores because they believe that there is a correlation between credit scores and the likelihood of filing a claim. According to studies, people with lower credit scores are more likely to file claims than people with higher credit scores. Insurance companies use your credit score as one of the factors to determine your insurance premium. If you have a lower credit score, you may end up paying a higher premium for your car insurance.
Soft Inquiry vs. Hard Inquiry
When you're shopping for car insurance, the insurance company may perform a soft inquiry on your credit score. A soft inquiry doesn't affect your credit score and it's only visible to you. However, when you actually apply for car insurance, the insurance company may perform a hard inquiry on your credit score. A hard inquiry can affect your credit score by a few points, but the impact is usually minimal.
How to Minimize the Impact on Your Credit Score
If you're worried about the impact on your credit score, there are a few things you can do to minimize the impact:
- Shop around: Don't apply for car insurance with the first company you come across. Shop around and get quotes from multiple companies. This will give you an idea of what you can expect to pay for car insurance and it will also minimize the number of hard inquiries on your credit score.
- Apply for car insurance within a short period of time: If you're shopping around for car insurance, try to apply for car insurance within a short period of time. This will minimize the impact of multiple hard inquiries on your credit score.
- Improve your credit score: If you have a low credit score, consider improving it before you apply for car insurance. This can help you get a better rate on your car insurance and minimize the impact on your credit score.
Conclusion
Getting a car insurance quote won't affect your credit score, but applying for car insurance may result in a hard inquiry on your credit score. However, the impact is usually minimal and there are things you can do to minimize the impact. Shop around, apply for car insurance within a short period of time, and improve your credit score if necessary.