Credit scoring is a new method used by insurance companies to set premium costs.  They are basing the cost of auto insurance on individual credit scores.  This trend is due to research statistics that have shown people with irresponsible money habits are more likely to have accidents and file claims.  Basically, automobile insurance companies believe that if you are unable to manage your finances, you are likely to be a greater liability to them.

In this scenario, it is possible that by missing as little as two credit card payments, your car insurance quote could double.  Many feel that this is unfair because it tends to primarily affect the working class in a negative way.  The majority of individuals with low credit scores are blue collar workers; thus this trend only makes it harder for individuals that may already be struggling.  In their defense, car insurance companies want it to be seen more as a reward for individuals with good credit:

• Individuals with excellent credit scores will actually pay even less for their insurance policy than they did before
• Individuals with normal credit scores will continue to pay average rates
• Individuals with poor credit scores will pay higher premiums

Credit scores are becoming a major factor in determining individual car insurance quotes.  If you are concerned what this may mean for you, you should get a copy of your credit history and FICO score so that you can better understand what to expect from your insurance company.