Does Paying Car Insurance Improve Credit?

  1. 730 POINTS
    Darald Novak AAI
    Retired Agent and Broker, Self Employed, Albany NY USA
    Yes - by not impairing your credit score and profile. How can this occur?  When your auto insurance is cancelled or terminated for any reason it may have earned more premium than you paid. Your carrier will bill you for the additionally 'earned premium' which is a legally collectible debt.  If you do not pay this debt, their collection efforts will most likely show up in your credit report and history. Your credit 'profile' is a significant factor that is considered in securing many things like insurance, financial contracts, loans, apartments, credit, etc.  Paying your debts (preventing collection activity which will be reported) definitely improves your credit by preventing it from getting worse.  Do whatever you can to keep your credit score and profile as positive as possible.
    Answered on March 4, 2014
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