Car Insurance Does cancelling insurance affect credit rating Canceling your car insurance is not likely to have a direct impact on your credit score. View Carriers Please enter valid zip Compare top carriers in your area By Insure.com's Editor | Updated on September 29, 2023 The page is part of the topic how to cancel car insurance Why you can trust Insure.com Quality Verified At Insure.com, we are committed to providing the timely, accurate and expert information consumers need to make smart insurance decisions. All our content is written and reviewed by industry professionals and insurance experts. Our team carefully vets our rate data to ensure we only provide reliable and up-to-date insurance pricing. We follow the highest editorial standards. Our content is based solely on objective research and data gathering. We maintain strict editorial independence to ensure unbiased coverage of the insurance industry. Canceling your car insurance is unlikely to directly affect your credit score. Insurance companies do not report policy cancellations to credit bureaus. However, there are some indirect ways in which it could impact your credit score. Potential indirect effects of canceling car insurance on your credit score Unpaid premiums – If you have any outstanding premiums when you cancel your policy, your insurer might send the unpaid amount to collections, and that could negatively impact your credit score. Coverage gaps – Cancelling without having a new policy in place could lead to a gap in coverage. If you get into an accident during this period, it might result in financial difficulties that indirectly affect your credit score. Credit-based insurance scores – In some states or regions, insurers use credit-based insurance scores to determine premiums. If you cancel multiple policies or frequently change insurers, it might be perceived as instability, potentially affecting future insurance rates. Best practices to cancel car insurance Follow these best practices to avoid affecting your credit score Pay premiums on time – Ensure you pay your insurance premiums on time to avoid any issues with collections and credit score impact. Plan ahead – If you’re considering canceling, have a new policy in place to avoid coverage gaps and financial risks. Shop wisely – When looking for new insurance, obtain quotes without affecting your credit score using soft inquiries. Conclusion While canceling car insurance directly does not impact your credit score, it’s essential to be mindful of potential indirect effects like unpaid premiums and coverage gaps. Pay your premiums on time, plan ahead, and choose insurance options wisely to maintain a healthy financial standing. In case you missed it Best Car Insurance Companies of 2024 Car insurance rates by state in 2024 What is full coverage car insurance? How much does car insurance cost for seniors in 2024? A complete guide to adding a teenager to your car insurance policy in 2024 What to do after a car accident that’s not your fault Total warfare: What to do when your auto insurer totals your car Car insurance claims: Who gets the claims check? Used car insurance costs: Most and least expensive models to insure The Best Car Insurance for Bad Credit of 2021 The best car insurance companies for speeding tickets Car insurance after a DUI Guide to car insurance discounts Proper insurance coverage for college-bound children How to read actually understand your auto insurance policy Car Insurance Companies New driver insurance grace period: What you need to know How much do insurance agents make Autonomous cars: 5 delightful and 5 distressing things Busted! Part 1: How insurance companies spot bogus claims Insurance options for rideshare drivers 10 things that are illegal but shouldn’t be 1/1 On this page Potential indirect effects of canceling car insurance on your credit scoreBest practices to cancel car insuranceConclusion Get instant quotes now ! Please enter valid zip Get Quotes