Ultimately, these ratings may play a role in whether or not you qualify for a loan, as well as what your interest rate will be.

Your payment history typically accounts for 35 percent of your credit score.The amount of money you owe typically accounts for another 30 percent. The length of your credit history accounts for 15 percent, and new credit as well as your credit mix typically account for 10 percent each. However, the scores from the different bureaus may vary because each bureau may collect different information, as well as use a different formula to calculate the score.

Closing Accounts

Many people are surprised to discover that closing a credit account may actually have a negative impact on their credit score. When an account is closed, it may shorten your credit history or change your overall credit mix. If the ratio of used credit to available credit increases, this could also have a negative impact on your score.

Having Too Many Cards

Applying for a lot of different credit cards may also be detrimental to your score. Each application results in a credit check, and too many credit checks may be considered a risk.

Since the amount of available credit being utilized is one factor that goes into your credit score, store credit cards pose a particular threat. They tend to have low credit limits, making it more likely that you’ll use a higher percentage of your available credit, lowering your score.

Be careful how many cards you use, and make sure you’re responsible with the amount of debt you consume. Having one or two credit cards, along with a student loan and a personal loan, is much more positive for your credit score.

It’s important to note that if you put a fraud alert or freeze on your credit report, there won’t be any impact to your score.

Stay Informed

If you don’t know where you stand financially, it’s a good rule of thumb to obtain a copy of your credit report at least once per year. Most credit reporting bureaus offer one free credit report per year, so it’s important to take advantage of that. This report provides you with information that could allow you to take action and fix any errors that are found in your credit.

When was the last time you checked your credit score?

Although a variety of factors, including the state you live in, determine how much a typical driver pays, you may nevertheless be able to reduce your costs. To give you a better understanding of what goes into insurance prices, we list some of these factors below, followed by some tried-and-true ways to save.

Factors that Affect Costs

There are a number of different factors that influence what you end up paying for car insurance. Depending on these factors, your rates may fluctuate. For example, you can get better rates by driving for an extended period without accidents or tickets. You may also qualify for lower rates simply as you get older and have more driving experience. Age and experience are among the multiple factors that determine auto insurance costs. These broad-based underwriting criteria include:

• Age and gender

• Marital status

• Years of driving experience

• Coverages and deductibles

• Type of vehicle

• Location of vehicle (state)

• Whether the vehicle is used for work or personal transportation

• Driving record

• Claims history

• Credit history

• Previous history of insurance coverage

Ways to Save

It’s possible to save money on your car insurance simply by being proactive. You should constantly check for discounts, compare different rates online, and look to take advantage of other excellent opportunities that may be available. There are discounts for education, good driving, or even installing safety equipment. You could get savings by doing any of the following:

• Insure more than one car

• Maintain a good credit rating

• Get good grades (if you’re a student)

• Take advantage of low-mileage discounts

• Increase your deductible

• Drop collision coverage on older cars worth less than 10 times the premium

• Install anti-theft devices

• Take defensive driving courses

• Remain a long-term customer

• Have no moving violations or accidents in three years

Insurance costs can fluctuate for many reasons. When you take charge of your coverage, you can identify what things may help you save. That’s why it’s important to shop for insurance, research any available discounts, and let your agent know that you may qualify for lower costs. Keep these tips in mind when it’s time to renegotiate your premiums or shop for new auto coverage.

1. Maintain a Good Driving Record. If you’ve never been at fault for an accident, ask for a safe driver discount. Car insurance quotes for safe drivers could help you lower the amount you pay every month. In addition, accident forgiveness could also play into lowering your car insurance rate.
2. Get Good Grades. If you are a student, getting good grades can earn you a discount on your coverage. Additionally, parents who have a high school or college student on their policies could also get a discount for the student’s good grades. A “B” average or higher is usually required for this discount.
   
3. Ask for a “Leisure Driver” Discount. Do you just drive to and from the grocery store? Are you just using the car to visit family once per month? If so, ask for a leisure driver discount. This type of offer is typically reserved for those who drive fewer than 50 miles per week.
4. Get an Anti-Theft Device. Do you have a car alarm or tracking device on your car? If so, you may try asking for an anti-theft device discount. Your agent should be able to provide you with car insurance quotes based on active and passive anti-theft devices.
   
5. Reduce Coverage for Older Cars. Is your car getting old? Consider getting car insurance quotes for the minimum coverage required by law. When the value of your car is low, you might not need full coverage anymore.
6. Get a Car with Anti-Lock Brakes. Cars with anti-lock brakes may also qualify for a discount. These devices tend to reduce the likelihood of an accident, and insurance companies offer better rates to drivers with lower risks.
7. Bundle Your Insurance Policies. Do you need homeowner’s insurance or renter’s insurance, too? For many drivers, it’s possible to get a multiple-policy discount. Using the same insurer for your homeowner’s, life or car insurance policy could lower your premiums.
   

Bundle Your Policies

If you have several family members under one policy, it’s possible you could qualify for a group discount, which could help lower your auto insurance bill. Additionally, when you bundle various kinds of insurance policies (such as homeowners, renters, or boat) through one company, many insurers offer multi-policy discounts. This could offer you not just savings, but also the added convenience of only having one insurance company and one payment for all your insurance needs.

Increase Your Deductible

Your deductible is the specified amount you must pay before your insurance begins to cover a claim. Increasing your deductible could help lower your monthly insurance substantially. The only drawback with increasing your deductible is that you risk having to pay more money out of pocket if you end up filing a claim. It’s therefore important to set aside funds to ensure you can pay the deductible if necessary.

Keep Your Credit in Good Standing

Although not widely known, establishing a solid credit history could help reduce your insurance costs. Insurers often use credit scores to help price auto insurance premiums for their customers. To confirm you’re getting the best rate available, ask your insurer if your credit score is considered. If it is, make sure to keep your credit in good standing by regularly monitoring your credit report and paying bills on time.