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How Your Driving May Affect Your Credit

A 2013 report by Allstate Insurance Company suggested that Seattle drivers are among the worst in the United States. The national average per driver is one crash every 10 years, but Seattle’s drivers get into a car crash every 7.8 years. The city is in the 160th place on the list of the 200 cities for safest drivers.

If you live in Seattle, you must always drive safely. Know that your driving habits don’t just affect your safety—it may or may not hurt your credit score too. This means that the way you drive also impacts your chances of getting a car loan, among others, in the future. Read on below to understand how your driving can influence your credit score.

Getting tickets and paying fines

A parking violation or traffic ticket may seem harmless, but it can damage your credit. Though the tickets will not show on your credit reports, leaving fines unpaid will cause negative information to appear on your history. The balance of your unpaid fines may be handed over to a collection agency, and the collection account could show up on the report. It doesn’t matter if the balance is small; the account will reduce your score significantly.

If you do have unpaid tickets, get a copy of your credit reports and see if they are reflected as collection accounts. If they are, contact the state department of motor vehicles and inquire about how to remove the negative information once you settle what you owe. In most cases, collection accounts stay on your report for seven years. To prevent having these on your reports, avoid tickets in the first place.

Being involved in road accidents

Accidents on the road can hurt you, both physically and financially. Even if there is insurance, accidents can—and will—cost you. It is no secret that insurance companies don’t pay up immediately, since they need time to sort out the details before they provide compensation. In the event the insurance policy comes with a deductible, you need to spend some money before the insurer covers the remaining costs.

You can be in deeper financial trouble if there is no insurance to cover medical bills or property damage. Paying such expenses may not be much of a problem if you have an emergency fund or adequate savings, but this will be really difficult if you don’t have a significant sum of money to spare. When accident-related bills aren’t unpaid, these will also be sent over to collections and therefore tarnish credit.

Dealing with DUI

A DUI charge will not show up in your credit reports, but the expenses that come with it may bring negative information that will lower your score. If you are charged with DUI, expect to shell out a generous sum for towing, bail, attorney’s fees and court costs. The money you spend on these, as well as the higher insurance premiums you need to pay in the future, can and will hurt your budget. It is possible that you will leave some bills unpaid just to cover the said costs.

You have the option to use your credit card to help you make ends meet, but increasing your credit utilization has a downside. The more money you owe, the higher the balances on your report. The higher your balances, the lower your score.

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