Car Insurance - preventing long line of credit checks?

They are not really lending you money if you pay by DD, as they can simply cancel your policy if you fail to pay so it's not like there is much risk to them.

I would think its extremely unlikely many of them would bother with the credit check (which will cost them money) until you decide to accept their offer.

I always get several quotes each year when my car insurance is due for renewal and have never known any of them to do a credit check before I take out a policy. In fact many don't even do a credit check when you do take out a policy and pay monthly. If you don't pay they just cancel the cover.

In article , Nick Read writes

Do you know which companies operate this way?

In article , Tumbleweed writes

Thanks, It was just that I recalled from a finance programme on television reports of insurance companies taking credit checks and that was for people paying it at the start of the year and not monthly.

Even better if I can start of on DD for a couple of months then pay ahead so I'm not leaving myself liable to paying insurance tax and MOT at the same time.

I'll need to be applying for a mortgage some point in the future so anything that helps not to negatively affect credit scoring is welcome.

If they do, it will be an identity check. This will not affect your credit rating.

I can see no reason why having car insurance would stop you getting a mortgage.

You can pay the annual premium in one go by direct debit. That's what I do. It doesn't have to be instalments. Of course you will probably be ripped off if you pay monthly.

Brian

Indeed. I can't see the connection between insurance and credit-worthiness. If you default on your payments, the insurance is null and void. Of course it may well make it more difficult for you to obtain insurance in the future...

Brian

I did this too recently. I approached a few of the companies on the net who search for the best quote from a range of insurers. I may have also approached elephant.com.

I subscribe to Experian's 'Credit Expert' service, which means I can get an online copy of my credit record at any time. I noticed this morning that searches have been made by Admiral and Royal & Sun Alliance - they could only have been the result of my search for quotes. The type of search is 'unrecorded', but I am not happy at all and have lodged a complaint with Experian

I thought one had to give explicit permission for a search to be made? I certainly don't recollect that happening, and certainly wouldn't have given permission. A credit check for a car insurance quote is quite ridiculous!

Wrong people. You should complain to those who initiated the check, though I suppose it won't do any harm to inform Experian that their client has apparently been making checks without lawful authority.

What does "unrecorded" mean? It was obviously "recorded" enough that you got to see it on your record!

It'll be in the fine print somewhere. In fact, if you've nothing better to do, it would be interesting to require the insurer to tell you where you gave them permission to do this. If they can't, then it would seem someone somewhere has committed an offence under the DPA.

I couldn't agree more. They should not be allowed to a credit check until such time as you actually ask for credit (which you do if you decide to accept a quote *and ask to pay by instalments*).

Certainly CIS, Direct Line, Eagle Star/ Zurich, Elephant.co.uk, AA, Endsleigh, NFU Mutual, Colonnade, just the ones I have dealt with/got quotes from relatively recently for car or home insurance - no sign of any of them having done a credit check, and I do check my credit files from time to time.

It isn't unheard of for some insurance companies or brokers to use a separate finance company for customers paying by monthly installments. What seems to happen there is that the finance company pay the entire years premium up front to the insurance company, then it's the finance company's responsibility to collect the premiums, and possibly they are also liable for the bad debts, hence they may do a credit check first to protect themselves. This does seem more common with commercial insurance where the premiums could be several thousand pounds per month. Personally I have never known this to happen with private car or home insurance.

Nick

The permission was probably buried in the small print. However I have queried this before and recall being informed that "unrecorded" searches play no part in credit checks and are *only* accessible by the company that made the original check. No idea why they are recorded but called "unrecorded".

Jim A

US insurers often do a credit check for car insurance, their reasoning being that people who have bad credit also tend to be more risky drivers.

"Nick Read" wrote

... they'd better not do that unless they've got your permission first ...

"Jim Alexander" wrote

I can think of (at least) two reasons for somebody wanting to withold consent for a company to search their credit file :-

(1) Don't want too many searches to show for future companies searching their record; and/or (2) Don't want that *particular* company to be seeing their record (for whatever reason).

OK, so the "unrecorded" nature of the search avoids the problem with (1) above, but what is their excuse to avoid (2) ?

"Jim Alexander" wrote

Presumably so that the *consumer* can see when companies have searched their record?