Bad Debts Can Raise Your Car Insurance

insurance5Everyone knows that the economy is rough right now. For many, the temptation is probably there to charge the credit card and pay later. And, sometimes, when the bills are due, the money to pay them is unfortunately just not available. If you feel like this, you probably are not alone. However, as your debt is rising and your credit score is dropping, one thing you might not have realized is that your car insurance rates are being affected.

How is this possible you ask? Debt, credit scores, and insurance? The tune to “one of these things is not like the other” is ringing in your head, but apparently that is not true. The three have a lot more in common than anyone could have foresaw. Today’s insurance companies are using your credit scores to determine how much they will charge you for your car insurance rates. So as your debt builds, so does your rate for car insurance. Because according to the insurance company, even though the economy is bad, a low credit score equals a risky driver on the road. This is definitely something to think about when the visa bill is due. So be wise when it comes to your finances and try to avoid bad debt.

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