If you own a vehicle, it’s especially important to keep your credit score in good shape.

You’ve probably heard that having good credit is important if you’re looking to borrow money. Having a solid credit score will increase your chances of getting approved for a new credit card, personal loan, or mortgage. But you may be surprised to learn that your credit score could impact your auto insurance rates, too.

Now, a credit score isn’t the only factor auto insurers use to decide what premium rates people qualify for. They’ll also consider things like a motorist’s age, driving history, and the type of vehicle they have.

But make no mistake about it — people with poor credit could end up paying a lot more money to insure their vehicles. In fact, 92% of auto insurers take credit scores into account when determining premium rates, according to Nationwide.

If your credit score isn’t in the best of shape, and you need to insure a vehicle, it’s a good idea to work to boost it quickly. Here’s how.

1. Pay all incoming bills on time

Your payment history is the single most important factor that goes into calculating your credit score, and so to raise yours, paying all bills on time is a solid bet. If you establish a history of timely payments, your score is apt to rise.

2. Get rid of some existing debt

Another key factor in calculating your credit score is your credit utilization ratio, which measures your existing credit card balances relative to your total line of available credit. If that ratio climbs above 30%, your score could take a serious hit. For example, if you have a total credit line of $10,000, you don’t want to carry more than $3,000 in credit card balances. If you’re over that limit, paying off some debt to creep back under the 30% line should help your score improve.

3. Get added as an authorized user on a long-standing credit card account

Just as being a newer driver could cause your car insurance rates to rise, so too can being a newer borrower hurt your credit score. That’s because the length of your credit history is taken into account when calculating your score. If you’ve only had a credit card for a year, you won’t do as well in this regard as someone with a credit card account in good standing for 10 years or more. The solution? See if you can get added as an authorized user on a family member’s long-standing account. That will give your credit history — and your overall score — a boost.

4. Correct errors on your credit report

When’s the last time you checked your credit report? If you can’t remember, make sure to do it before you apply for car insurance. It’s common for credit reports to contain errors, and if yours has one that’s working against you, it could be dragging your score down. You can visit annualcreditreport.com to access your credit report at no cost.

You’d think that being late on some bills or having a fair amount of credit card debt wouldn’t cause you to pay more for auto insurance. But that’s not the case. Your credit score does matter when you’re seeking out car insurance, so make an effort to bring that number up before you apply. Doing so could result in a lot of savings on your ongoing premiums — and make owning a car less expensive on a whole.

Ensure you are selecting the right car insurance coverage

Auto insurance is something that most people don’t think about very frequently. While there are several factors that drive people to look to change auto insurance carriers, it is important to educate yourself in order to ensure you select the right coverage for you. The right coverage means not paying for coverage you don’t need and not foregoing coverage that would make sense for your personal situation. While price is a major factor, we also consider other factors such as customer service and the claims process when choosing what we think are the best auto insurance providers.

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