New research from ClearScore, the UK’s number one credit checking service, has found that 75% of drivers are unaware that their credit score is linked to their car insurance premium, despite new data showing a correlation between the two.
When asked about the factors that impact their car insurance premium, people most commonly name their no claims bonus (71%) and age (70%), with just a quarter identifying their credit score1 could impact the price they pay .
Yet new data from ClearScore, which analysed over 9,000 car insurance quotes and credit scores, shows there is a correlation between elements contributing to someone’s credit score and the premium they are offered, with users with a higher score typically seeing lower premiums. This connection was similar to the correlation between factors such as age and no claim’s bonus, and the premium a customer is offered.
Despite this link, drivers are unlikely to take action to improve their credit score in order to reduce their premium – just 9% say they have done so. Yet, some have gone to great lengths to bring down the cost of their premium by looking at other factors, including:
– Paying annually instead of monthly (32%)
– Reducing the number of miles they drive (22%)
This is because consumers are unaware that credit scores are connected to the cost of their car insurance – 82% of people would take steps to improve their credit score if it meant getting a cheaper car insurance premium.
To help users get the best possible deal, ClearScore has launched a personalised car insurance tool in partnership with Confused.com, making it easy to compare quotes from more than 100 market-leading insurers. ClearScore uses the information from your credit report to pre-fill parts of your application, making the journey at least 30% quicker than major price comparison sites. In the near future, ClearScore is also working on a dynamic pricing model that will price your car insurance based on your credit score as a whole, giving the consumer greater control over factors that impact their premium.
Justin Basini, co-founder and CEO at ClearScore “A lot of us will cut down on the miles we drive or add another driver to a policy to reduce our car insurance premiums. However, very few of us will take steps to improve our credit score, as most are unaware the elements within it can affect the price we pay for insurance. With premiums on the rise, now is the time to take control over yours – whether it’s shopping around at renewal to find the best deal or improving your credit score. Once you’ve checked your credit score, there are a few simple steps you can take to improve it, such as getting on the electoral roll and using your credit card little and often.”
To help users improve their credit score, ClearScore’s has created a range of free, interactive coaching plans.