How does a poor credit score impact a driver’s overall finances?

We know that the credit score significantly affects a driver’s odds of getting approved for an auto loan, as well as the loan’s terms and interest rate. By and large, the higher your credit score, the lower the annual percentage rate (APR) you will get. You may be surprised to find that the auto insurance premiums are also affected by your credit score because many auto insurers use credit-based insurance scores in rate making. The credit-based insurance score is not the same as the regular credit score like FICO, but it is based on similar factors, such as payment history, outstanding debt, credit history length, pursuit of new credit, and credit mix, to determine your risk level. However, for insurance applicants living in Massachusetts, Hawaii or California, insurers are prohibited from using such credit-based insurance scores in their rate making.