Emily Donohue

From Emily Donohue, managing editor, the Wealth Builders Club: Forty-seven states allow this controversial practice…

In most states, auto insurers treat people with low credit scores worse than drunk drivers.

That’s because insurers admit to using credit scores to determine insurance rates.

From insurer Esurance:

Statistical analysis shows that those with higher credit scores tend to get into fewer accidents and cost insurance companies less than their lower-scoring counterparts.

Consumer Reports analyzed more than 2 billion price quotes from 700 insurance companies. The results confirm low credit scores will cost you…

Cost of High Credit Score

Miami Traffic

Drivers in Florida fare the worst. There, a single driver with a clean record (no tickets, etc.)—but a low credit score—pays an average of $3,826 annually for auto insurance.

His excellent credit counterpart pays just $1,409 annually—$2,417 less.

It gets worse: A low credit score has a worse impact on auto insurance rates than a drunk-driving conviction.

A Florida driver with a DUI conviction—but excellent credit—pays $2,274 per year for coverage… $1,552 less than the driver with a clean record and a low credit score.

Bottom line: A low credit score means you’re shelling out more cash for things not even related to borrowing—like auto insurance. Even if you have good credit… strive for excellent credit. It could save you thousands in the long run.

Wealth Builders Club members can learn the key factors that make up your credit score—and an easy way to “bump them up”—inside our “DIY Credit-Repair Workshop.” It’s essay No. 7 in the club’s Debt & Credit Solutions essay series.