Which is Worse: Having a Low Credit Score or Having a DWI?

Which will cost you more: Having a low credit score or getting charged with Driving While Drunk?

If you’re thinking like an insurance company, you’re going to say the low credit score is worse than the DWI. And you’re going to charge your drivers higher premiums for it.

Is that reasonable? I don’t know about you, but I’d rather be a passenger in a car with a driver who had a low score than with an intoxicated driver.

Look at this comparison of auto insurance costs for an average new insurance customer*:

Low Credit Score: $1,521 insurance premium

High Credit Score but with a DWI: $1,097 insurance premium

The person with a low credit score pays $424 more than the person with the DWI.

Keep in mind that you can have a low score simply by carrying too much credit — even if all your payments are made on time.

I have seen credit reports for physicians, dentists, and attorneys who had low scores due to carrying a lot of credit. These professionals had high incomes and could easily afford their credit. They made all payments as agreed. But, according to statistics, they have higher insurance premiums than the person driving drunk!

Does this make sense to you? I’d love to hear what you think.

In the meantime, it cannot be overstated how important it is to have a good credit score. A low score will cost you more in every financial arena, from buying a home to insurance premiums to credit card rates.

If your score is below 740, you will be wise to examine your report to determine how you can improve it and save yourself a bundle of money.

*Thanks to Chad Kusner, president of Credit Repair Resources, Inc. for the statistics.

 

 

 

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