Trying to get auto insurance when you have bad credit can be frustrating. Credit scores are major risk factors used by insurance companies to calculate annual premiums. You can still get the cheapest car insurance by addressing your credit situation.
Explain Mitigating Circumstances
Sometimes things are simply beyond your control. For example, if you are recovering from a major illness, you may have accrued medical expenses beyond what your health insurance paid for and your credit score has dropped as a result. Your score will continue to be poor until your debts are addressed. In the meantime, you can explain your situation to the insurance company. And if you have always paid your insurance premiums on time, offer documentation that proves that to further mitigate your situation. Your insurance company may be willing to give you a chance with a lower rate.
Verify Credit Scores
Remember that you actually have three credit scores. Make sure there is no significant disparity between them. While they may not be exactly the same, they should not be extremely different. Find out if the insurance company uses only one of the scores and, if so, which one. If they use all three, ask exactly how that is done.
Improve Your Credit Rating
Even if you have errors on your credit report, it is not possible to correct those overnight. You will need some time to improve your score. This entails working with creditors to correct errors, setup payment plans, and otherwise pay down debt. As you begin to do this, your credit score will slowly improve. Do everything you can to pay your bills on time. If you are going to be late with a payment, always contact your creditor so they do not report you to the credit bureaus.
Consider a Bad Credit Insurer
If you have to resort to one of these insurance companies, do your due diligence to make sure the company is credible. These types of insurance providers are not available everywhere so you will need to do some research to find the cheapest car insurance offered in your area.