Another way to establish credit is to take out a car loan, say, for a year. Pay it off! Make sure the bank or finance company you use reports to the bureaus. Maybe you can buy some new wheels from a tire store on credit. Make sure you pay off the loan on time and as agreed. The purpose of all of this is to establish credit. But, you don't want to hurt yourself by establishing poor credit. That defeats the point of trying to lower your insurance rates. It also, sets you up to qualify for buying a new home if you get and maintain good credit.
In addition to good credit, the auto insurance companies look at how long you have worked at the same job. Try to establish yourself in one place of employment. That gets reported to the insurance credit bureaus. How long you have lived in one place can affect the price as well. If you have lived at one address for any length of time, get your insurance established first, then move. Insurance companies often penalize you if you have moved too many times in the last two years.
Why? you ask. Why credit? Insurance companies believe, based on statistics, that you are more likely to be a good driver and not have claims and accidents if you have taken care of your credit. Good credit is also a predictor of how well you will be at paying for your monthly auto insurance premium. Companies don't like to have to send out cancellation and reinstatement notices. It's too much paperwork! Paying on time each month and always maintaining insurance keeps you in good graces with the car insurance companies and they will reward you with lower rates.
Now, if you have bad or no credit, all is not lost. We do have a couple of insurance companies who don't use an insurance credit score to determine the price of your insurance. It's pretty clear from the beginning of the quote if you have good or no credit when you call us for a quote based on the placement of the prices of insurance among the approximately ten companies we represent. The non-credit score companies will rise to the top of the list as being the least expensive and the credit score companies will drop to the bottom with the highest rates. We pledge to always offer you the least expensive policy we have to offer based on your prior insurance limits.
One of the drawbacks to the non-credit score companies is that you are restricted to lower Oregon State automobile insurance limits such as 25/50/20 and they limit which kind of cars they will insure for full coverage.
If you have any questions about this or any other auto insurance related topic, feel free to email me. I'll be happy to respond.