Navigating Car Insurance with a Bad Credit History

Navigating Car Insurance with a Bad Credit History
Navigating car insurance with a bad credit history can feel like an impossible feat, with many companies only approving the most squeaky-clean of credit histories. Yet there are still plenty of options available. Here are seven things to consider when looking for car insurance if you have a bad credit history.

Firstly, you should acknowledge that it will be more expensive to insure your vehicle if you have a bad credit score. Insurance companies consider individuals with poor credit to be a higher risk and as such, premiums can be two to three times more expensive than someone with a good credit score.

Secondly, one of the best ways to save money on car insurance with a bad credit score is to increase your deductible. Although your premiums will be higher, this can result in huge savings year on year.

Thirdly, have a good look around and compare different policies to find which offers the best value. Be sure to factor in not just the cost of the insurance but also any additional benefits such as roadside recovery, courtesy cars or replacement vehicles.

Fourthly, you should shop around for providers as some insurers may ask for additional evidence of your credit worthiness. Although this might seem like an extra hassle, it is worth spending time searching for the company that is willing to provide the best cover based on your individual circumstances.

Fifthly, think about opting for a black box policy. These policies offer coverage that is tailored to your specific requirement and takes into account different factors such as your driving style or where and when you drive.

Sixthly, consider putting yourself on a pay-as-you-go car insurance policy. Although this type of policy may cost more in premiums initially, it can be beneficial if you are looking for flexible or short-term coverage.

Seventhly, if you are paying your premiums by direct debit and become behind in payments, you could end up with a bad credit score. To avoid this, consider paying your premium in full at the start of each year or setting up a standing order payment option.

Having a bad credit history doesn’t mean you are stuck with a sub-par car insurance policy. Before signing up for cover, carry out research to check the market for competitive prices. You can also shop around and look for insurers who are willing to look beyond your credit score and instead focus on your ability to pay.

You should also keep track of how often you need to make a claim. If you are making frequent claims, then this may also be a contributing factor to your car insurance going up.

In addition, look out for particular discounts and savings that every company offers. This may include a discount for insuring multiple cars on one policy or a discount for fitting a black box that records your driving style.

Making sure you stay up to date with your payments and keeping regular track of your credit report are also important. This way, you can see if anything has changed and if any additional action needs to be taken to clean up your credit score.

Improving your credit score does take time and effort, but by taking the right steps, it is possible to get the best car insurance coverage in spite of a bad credit history.

One of the best ways to rebuild your credit history and balance is by keeping track of your expenses and paying your bills on time. For instance, if you are late on payments, this will have a negative impact on your credit score. Keeping track of your spending can give you an accurate view of your budget and enable you to pay your bills on time.

Another way to rebuild your credit history is to repeat the process of taking out a loan and repaying it on time. As your credit score improves, you can apply for a loan with a more competitive interest rate. If you stick to the repayment terms and make regular payments, this will improve your credit score as well as making it easier to obtain car insurance with a fair and competitive premium.

It can also be helpful to make sure that any existing debt is kept to a minimum. This can be done by budgeting, setting up separate funds for essential and non-essential spending and avoiding taking out additional loans.

Finally, dont be tempted to keep switching insurance companies in search of the best deal. Instead, you should stay put with the same insurer, as long as the cost of the premium is within your budget. Doing so will also set up a credit record that may help your credit score.

Rebuilding your credit score takes time, but it is possible to obtain car insurance with a bad credit history. If you are willing to shop around, consider a black box policy or opt for a pay-as-you-go system, it is likely you will find the most cost-effective option. Additionally, if you are able to make timely payments and keep your existing debts to a minimum, your credit score can begin to improve over time.