Does your credit score impact your car insurance rate in Canada?

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Your credit score can affect your ability to get a credit card, qualify for a loan, rent an apartment, buy a house, and even land a job. But can this affect your car insurance rate?

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It depends. In some Canadian provinces, car insurance providers are allowed to access your credit rating while others cannot.

In Canada, credit scores range from 300 to 900. According to Equifax, a credit reporting agency, a credit score of 660 to 724 is considered good, a score of 725 to 759 is very good and 760 and above is considered excellent.

It’s when someone has a score below 660 that they may start to have trouble borrowing money or proving their reliability. A credit score below 560 is considered poor and can make it especially difficult to prove that you can use credit responsibly compared to those with higher scores.

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Where can I use my credit score to set my auto insurance rates?

Many Canadians probably don’t know that their credit score can affect their auto insurance premium, unless they live in Ontario and Newfoundland and Labrador.

These two provinces are the only provinces in Canada that prevent auto insurance companies from using credit score data to influence insurance rates. In Ontario, for example, you will only be assessed on your driving experience, driving record, age, gender, where you drive, type of car you drive, how you use your vehicle and what coverage you need.

If you are get car insurance in alberta, however, your auto insurance company may use your credit score to determine your premium, but they cannot do so without your consent. So if an insurance company asks to see your credit score, you have the right to say no.

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In Nova Scotia, car insurance companies may ask you for your credit information when calculating your premium, but you cannot be refused if you refuse.

Can credit scores be used to set insurance rates in provinces where insurance is public?

For other provinces in Canada, there are no clear rules or regulations on how it works. That said, in provinces where auto insurance is regulated provincially, such as British Columbia, Manitoba, and Saskatchewan, drivers shouldn’t worry too much. While nothing prevents insurance companies in these provinces from asking drivers for their credit history, these government providers also do not list credit history as a guideline for determining a person’s premium on their sites. website.

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Although the relationship between credit scores and car insurance scores can be murky, the Insurance Bureau of Canada (IBC) has made efforts to protect the interests of consumers.

In 2010, BAC’s Board of Trustees approved the Code of Conduct for the Use of Credit Information by Insurers. Insurers seeking consumer credit information are required to receive informed consent from the customer and use other relevant information for underwriting and underwriting purposes if the customer does not have a credit history.

Insurers also cannot deny or cancel an insurance policy because of a customer’s refusal to consent and they must provide advice if a customer feels their credit rating has been adversely affected by “extraordinary events of life,” the Code says.

When applying for auto insurance, always check your province’s rules regarding credit scores and insurance premiums. The more knowledge you have, the better you will be able to defend yourself with your insurance company.

LowestRates.ca is a free, independent rate comparison website that allows Canadians to compare rates for various financial products, such as home and auto insurance, mortgages and credit cards.