How does switching car insurance affect my credit score?

Switching car insurance itself does not directly impact your credit score. However, certain factors related to the process can have an indirect influence.

Factors that may affect credit score

• Credit inquiries – When obtaining quotes from different insurers, they may perform a “soft” credit inquiry. This type of inquiry doesn’t harm your credit score. However, too many inquiries in a short period may have a slight negative impact.

• Payment history – Timely premium payments contribute positively to your credit score. However untimely payments might affect your credit score.

• Cancellation of old policy – Canceling your old policy won’t affect your credit score directly, but avoiding any outstanding payments or fees is essential.

• New policy’s terms – If you opt for an approach with installment payments and miss them, it could negatively impact your credit score.

Conclusion

Switching car insurance doesn’t have a significant direct impact on your credit score. Be mindful of credit inquiries and maintain a good payment history. The key is to choose a new policy that suits your needs and budget while keeping up with premium payments to maintain a positive credit history.