Your credit score can affect your car insurance rates because insurance companies use it as a factor in determining your level of risk as a policyholder. The reasoning behind this is that studies have shown that people with higher credit scores tend to file fewer claims and are less likely to engage in risky behavior.
Generally, if you have a good credit score, you will be considered a lower risk and may be offered a lower premium. On the other hand, if you have a lower credit score, you will be considered a higher risk and may be offered a higher premium.
It’s worth noting that, while credit scores are commonly used as a factor in determining car insurance rates, not all insurance companies use it and some states have laws that limit the use of credit scores in determining rates. Additionally, the use of credit scores in insurance rate-making is not a standard practice worldwide, it varies based on the country and the laws of that country.
It’s always good to compare quotes from different insurance companies and to check with your insurance provider for their specific process.