When you think of your FICO® Credit Score, you mostly think of loans. “How will my credit score affect my mortgage?” is a commonly asked question from both first time home buyers and long term owners. Similarly, there are those with concerns regarding their FICO Score and auto loans. For example, having a higher credit score could make getting a car loan easier. But could your FICO Score be impacting another aspect of your car?
In a recent article from CNNMoney, drivers with low FICO Scores could pay as much as 91% more than those with top scores. Those with low scores could be paying almost twice that of those with high scores. While the insurance companies may use a different algorithm than lenders, it still operates on a similar principle. As a higher score may suggest a higher likelihood of someone paying off a loan on time and a lower score less likely, for car insurers a low score could also indicate a higher probability of incurring a loss.