Having good credit is important to your financial well-being— especially when you want to make a large purchase like buying a home or car. What you might not know is that good credit can also earn you a lower rate on your auto insurance.

Read more to find out how credit counts toward your auto insurance rates and what you can do if your credit is less than perfect.

Everyone’s Doing It
Most U.S. insurance companies, including Esurance, use credit-based insurance scores to establish eligibility for payment plans and to help determine insurance rates. If you have a high credit-based insurance score, you can generally expect to pay less for auto insurance than someone with a low credit score.

Credit-based Insurance Scores
The insurance industry uses credit-based insurance scores because actuaries and research analysts have found that the scores are a statistically significant predictor of accident potential. Though it seems strange that there’s a correlation between how you drive and how you use credit, it has proven to be a valid relationship statistically.

Your Credit File
Esurance uses ChoicePoint to obtain your credit score. ChoicePoint is the leading provider of consumer reports to many insurance companies.

You have the right to dispute inaccurate information in your credit file. In fact, to make sure it’s accurate and to prevent identity theft, you should review your credit report at least once a year.

Because Esurance is only allowed to obtain your consumer report and not allowed to change it, you should contact ChoicePoint if you have questions about the information we obtained from your consumer file. (If you get in touch with them within 60 days, you can also receive a free copy of the report used.)

Esurance Protects Your Privacy
Your privacy is important to us. You won’t be surprised when we verify your personal information. We let you know while you’re buying your auto insurance policy when we’re going to verify your personal information. You can also rest-assured that your information is secure on our Web site when you buy a policy from us.

For more information about credit-based insurance scores, visit the Esurance Learning Center. You can also take a look at ChoicePoint at www.consumerdisclosure.com. In addition to providing credit-based insurance scores, ChoicePoint also helps auto insurance companies verify driving records and claims histories.

Get your free quote from Esurance today to find out if you save on auto insurance.