Not only can it reestablish your car credit signing up for a high risk auto loan can eventually help many consumers with problem credit lower their car insurance costs
What we know
Borrowers with damaged credit may not realize it but by at the time they sign up for an auto loan they also start the ball rolling to save themselves money in other areas down the road.
Here at Auto Credit Express we know why this can happen because for the past two decades we've been matching up car shoppers with bad credit searching for online auto loans with those new car dealers that can offer them their greatest opportunities for auto loan approvals.
But unlike loans from BHPH dealers that offer little chance for improving their credit, the high-risk auto loans these dealers offer are from lenders that report both loans and payments to the credit bureaus. This means that timely payments can both improve a borrower's credit history as well as raise their credit scores.
But there are also indirect advantages to making on-time auto loan payments every month. In this case, once these borrowers begin the process of rebuilding their car credit, they may begin to notice a gradual decrease in expenses in other areas.
Credit scores and car insurance
While there are many things that are obviously tied to FICO scores – the interest rates for car loans and even the ability to finance a vehicle are some of the first things that come to mind - there are other aspects of vehicle ownership that can also be influenced by credit scores. One of those facets is the cost of auto insurance.
In many states car insurers are given the option of requesting a credit inquiry along with the corresponding credit score when someone applies for coverage. If that person's FICO scores are on the low side, the insurer can charge that person a higher rate for their insurance premium. The reasoning behind this is that consumers with lower credit scores are more likely to miss a monthly insurance payment. Since missed payments can mean either collection action or a policy discontinuation – situations which, in both instances, mean additional expenses for the insurer – insurance companies justify the higher cost for the same coverage to customers with lower credit scores as a way to offset these possible costs.
The good news for borrowers living in these states is that as their FICO scores get better, the cost to insure a vehicle should drop. The reason for this is that insurance companies usually reevaluate auto policies on a yearly basis. Provided nothing else has changed – such as a new speeding ticket or adding a teenage driver – policyholders whose credit has improved should see a reduction in the cost of their auto insurance premiums.
How we can help
The bottom line to all of this, as we see it, is that if you have credit problems and need a car and think you're paying too much for auto insurance, there's a good chance we might be able to help.
Rather than checking out a BHPH car dealer, at Auto Credit Express we want car shoppers with poor credit to know that we specialize in helping consumers with car credit issues find dealers for their best chances at approved auto loans.
So if you're ready to reestablish your auto credit, you can begin now by filling out our online auto loan application.