There is much debate over the use of credit scoring to calculate auto insurance rates. There have been similar debates in the past about using age, sex, marital status, etc.

Insurance rates are not purely calculated based on credit history. There are other variables such as where you live, the type of car, driving record, etc. The goal of getting all of this information is to correlate the insurance premium rate as closely as possible with the actual cost of potential claims. That is important to understand.

If you are able to continue to have a clean driving record you should see if your insurance company allows for a safe driver discount or other discounts that will help absorb the higher rate due your credit rating.

Using insurance company statistics it is known that drivers with bad credit historically file more accident claims than drivers with good credit. Credit information may also determine whether an applicant is likely to pay premiums in a timely fashion.

There are now companies that install a device, smaller than a deck of cards inside your car. It records when, how fast and how far the vehicle drives. Progressive Group is now using that as a basis for rates and if you drive at consistent levels without incident, it can save you up to 20 percent on auto insurance.

Similar to credit scoring, these initiatives will cause some concern with some consumers.

CarInsurance.com does represent carriers that use credit scoring and we also have carriers that only review driving records for rating.