You may be aware of how your credit score will affect purchasing a home or taking out a credit line, but what about your insurance? If you've ever wondered how your credit score impacts your insurance premiums, look no further. 

Does an Insurance Score Affect Your Credit?

As you just found out, your credit score does impact your insurance score. Which, in turn, affects your insurance premiums. However, Botma says, "Your insurance score has zero impact on your credit. In fact, it doesn't even qualify as an actual inquiry when your insurance score is run." If you are in the market to purchase a home or a vehicle and worry about your insurance score affecting your closing, don't be.

Your insurance score is used only by insurance carriers to determine premiums. Some other items that determine your insurance premiums are as follows:

Do Insurance Quotes Affect Your Credit Score?

In simple terms, no. Botma states, "The same way your insurance score doesn't affect your credit, neither does running insurance quotes. If anything, shopping carriers shows lenders that you are careful with your purchases and are a responsible consumer." 

He says, "This myth that insurance scores are similar to or the same thing as pulling your credit score needs to be clarified. Most consumers are in the dark when it comes to insurance how-tos because that's why they have an agent. However, a little education goes a long way toward a better understanding of how insurance works."

Insurance quote process:

When you work with an independent insurance agent, they will use your personal information to provide the best quotes through their carriers. They will need the following data to be successful:

Then your agent will plug your personal data into their rating system and quote with multiple carriers. These carriers will run your insurance score while quoting your insurance coverage. This will not impact your credit score or show as an inquiry, and is a way for your premiums to be determined. Once rates are offered, your agent will present the best options based on coverage and pricing. 

Does Your Credit Score Affect Car Insurance?

The same way that your credit score determines your insurance score and thus determines your premiums, yes. Again, if you have a bad credit score, carriers take that into account and raise premiums. 

On the flip side, if your credit score is fantastic, you will get more competitive rates. Car insurance premiums have risen in the past decade. This is partially due to the number of drivers on the road and the claims that have been filed. With more people, more accidents occur. The factors that impact your auto insurance premiums are good to know so you can be prepared.

Car insurance rating factors:

Your auto insurance is individualized and based on your specific information. To know how much you'll pay and the coverage you need, get with your independent agent.