I have read that credit is a factor in the price people pay for car insurance. Does that mean every time I get a quote that my credit score is being dinged? I want to shop with as many companies as I can to find the best rate but I'm afraid that this will cause a major hit to my credit score.
Jul 14, 2016Decatur, GA
Jul 14, 2016
Auto insurance is priced using an "insurance score" which does factor in a soft credit inquiry, not a hard credit pull, as well as your past driving history. This differs significantly from the way your credit is used when applying for a credit card or bank loan. Any time that your score is pulled for financial purposes of obtaining credit, it impacts your rating because other financial institutions are able to view the number of times your credit has been ordered. The more pulls you have, the worse it appears on your credit report. Luckily, auto insurance companies only use a soft inquiry when pricing your coverage and those requests are not available to any entity other than yourself when you request your annual credit report. Rest assured, you can insurance shop without being concerned of the impact to your credit rating. Best of luck!