Your credit rating can have a significant impact on the rates you pay to your car insurance company. Therefore, if you want to get the best rates possible, you should take a few simple steps to make sure your credit rating is as high as possible.
Obtain a Free Copy of Your Credit Report
One of the best things you can do to make sure your credit is as high as possible is to get a copy of your credit report each year. Luckily, the government has determined that everyone has the right to see his or her credit report once per year. Therefore, you can go to www.annualcreditreport.com to access your free credit report.
Once you receive your free credit report, scan through it for errors. Even the smallest of mistakes can have a major impact on your credit rating. For example, if your credit card company has incorrectly reported your line of credit limit, your credit score can be lowered. This is because your credit score is based partially on the ratio of your debt to your line of credit. If you have a debt that is equal to more than 30% of your line of credit, your credit score can be adversely affected.
If you find a mistake on your credit report, report it to the credit reporting agency that had the wrong information. The company will have 30 days to investigate and correct the information if they were in error. In addition, they must send the corrected information to the other credit reporting agencies and you can request that they send a copy of your revised credit report to anyone that has recently looked into your credit report – including your car insurance company.
Use Your Credit Card
If you have a credit card – use it. The more you use your card and make regular payments on the debt, the more you will establish that you are a responsible credit card holder. Use your credit card for your every day purchases so you can build up your credit. Not only will this improve your credit rating, it is also more convenient to use a credit card and many offer extended warranty and purchase protection that you cannot get when paying with cash. Just make sure to pay the bill off in full at the end of each billing cycle so you don’t get hit with big finance charges.
Pay Your Bills On Time
Missing a bill payment or paying it late can have a major impact on your credit score. Even library fines and unpaid traffic citations can hurt your credit score. Therefore, get your bills paid. If you don’t have the money to pay a bill, call the company you owe beforehand and make other arrangements with them so they do not report you to the credit reporting agencies. Most companies are more than happy to work with people that are making an effort to pay their debts in some way.