For those people looking for a way to reduce their car insurance, home insurance or other insurance premium costs, you may want to look at your credit report. Your credit report is not often thought of as having a link to your car insurance needs, but it is, in fact, one of the biggest and best tools for you to use to get a lower cost. The reason for this is your insurance provider’s need to know how risky it is to work with you. Some companies are using credit reports to determine risk factors related to car insurance.

What’s The Link?

What could be the link between credit scores and insurance premiums? Many car insurance providers, home insurance providers and even some other insurance companies use credit scores to determine how much of a risk you are to them. If you are a new customer with a company, for example, the company will likely pull a credit report on you to determine what type of a borrower you are. Here’s why.

• If you have a higher credit score, research and evidence points to you having, most likely, smaller car insurance plans.
• If you have a lower credit score, evidence shows that you are more prone to having more car insurance claims.

The two may not seem like they should be linked, but in fact they are. This information on the link between credit history and claim filing is one based on research from the various car insurance companies. They looked back at drivers over a period of time and found a link between these two factors. In short, those drivers who have good credit scores are also better drivers.

What You Can Do

How will your credit report affect your application with an insurance company? The fact is, that depends on what is on your credit report. If you have not done so yet, get a free copy of your credit report at AnnualCreditReport.com (the only, government-authorized site for accessing your free credit report from each of the three largest credit bureaus.) Then, ensure it is up to date and accurate.

It is also a good idea to be a good credit user. Make your payments on time. Ensure you pay down debt and live within your means. By doing these things, you not only boost your ability to manage your credit debt, but you also may end up with a lower car insurance premium or house insurance premium as a direct result. If your credit score goes up, do not expect your car insurance company to automatically reduce your premium, but you can call the insurer and ask for a better rate.

Wondering what the best minds in money are tweeting about? Every other Tuesday we’ll fill you in on the conversation with Tuesday Money Tweets. You’ll get the 140 characters (or less!) of the financial wisdom you crave from around the Twitterverse.

@Prentms: Labor Day is a day to honor Industrial Age workers. The Industrial Age no longer exist. Do you aspire to a JOB in manufacturing?

@OutofYourRut: Any attempt to eliminate debt without paying it down is a shell game we play with ourselves to make debt more tolerable.

@simonsinek: Success will buy you a new house. Fulfillment will leave you inspired when you come home at night.

@JohnCMaxwell: Your present circumstances don’t determine where you can go; they merely determine where you start. -Nido Qubein

@MichaelHyatt: Productivity used to matter more than attitude. Not now. Attitude is what you are selling.

@Money_Ministry: Christian ministry must be delivered with agape love, not with any exchange of anything, not with any expectation of return, or revenue.

@FrugalFreebies: MONDAY FREEBIE CHECK-IN: Since there is no mail today – what was the worst freebie you have received?

@InvestorJunkie: “never before has govt spent so much & intervened so directly in credit allocation 2 spur gwth, yet the results have bn mediocre at best.”

@EverydayFinance: Ironic,the administration claims they want to “make homes affordable” (even have a program w that name),but keep propping up prices w tax $$

@moneybeagle: Ever find a small gap that was leading to big heat or A/C going right out the window? I did!

Wondering what the best minds in money are tweeting about? Every other Tuesday we’ll fill you in on the conversation with Tuesday Money Tweets. You’ll get the 140 characters (or less!) of the financial wisdom you crave from around the Twitterverse.

@IAmAMoneyMagnet : Free Ben & Jerry’s & Starbucks Today! {3/23/10}: Today is March 23-otherwise known as FREE Ben & Jerry’s Cone Day.

@RamseyShow: Blake: Recent college graduates carry an average debt burden of $23,200. Students have borrowed $527 billion to go to school. – Equifax

@SuzeOrmanShow: HEALTH CARE REFORM HAS PASSED AMAZING HISTORY HAS JUST BEEN MADE

@thomasjstanley: Money makes life easier, not better.

@brokeinthecity: Money only makes you happy if you have more than your neighbours

@johncmaxwell: If you want to get ahead with others, focus less on CORRECTING & more on CONNECTING.

@christineromans: Examples so far of luxuries u cannot live w/o — a nice meal out, fancy cupcakes, fine champagne. Only food?!

@frugaldad: New student loan legislation reduces cap on required loan payments and reduces the req’d payment term from 25 to 20 yrs. After 20, forgiven.

The United States is a country that is heavily dependent on automobiles – perhaps more so than any other nation. For better or worse, a vast majority of towns and smaller cities in North America feature limited or no public transportation, so owning a vehicle is practically necessary in order to get anywhere.

Taking care of your family members is ultimately of very high importance. Holding your job and delivering money to ensure everyone is taken care of while working towards a better future is obviously essential to living the good life.

These days, driving is more expensive than ever. It takes a lot of money just to make things happen. The economy isn’t doing anybody a favor, either. The price of oil has gone up globally, so the amount people pay at the pump has gone up to around $4 a gallon, and the oil that goes into everything else relevant to their vehicle’s needs is more expensive too. Jobs have been cut significantly in 2008, making for tight money crunches in most households, and with the cost of everything else combined, it’s easy to see why people aren’t rushing out to buy new vehicles every year. There’s just no money to go around for that.