Insurance companies consider an applicant’s credit score when making decisions about whether to offer coverage, and South Dakota residents need to understand how this factor affects their rates. The insurance companies base pricing on the likelihood that an applicant will make a claim against his or her policy. Research conducted by insurers indicates that people with lower credit scores are more likely to make claims for damages caused due to a car accident. As a result, they pay higher rates for their coverage.
If an individual’s credit is less than stellar, there are some things he or she can do to improve it. Paying bills on time is one way to get back on track. If the issue is one of lack of organization, then writing down all the bills on a calendar or arranging for them to be paid through automatic withdrawal can help to ensure that nothing gets missed.
In a situation where a person needs to re-establish or repair their credit, they may need to consider getting a prepaid credit card. With this financial product, the cardholder loads the card with funds and can then use it to pay for items. Since the money has already been paid, there is no danger of the person getting into trouble with either not making payments or going over the card limit. The amount of the deposit on the card is its limit.
It may take time, but a person with credit issues can improve their credit and get the benefit of lower car insurance rates in South Dakota.