Question: I'm a senior citizen and I've never had a traffic ticket in my life. Never had an accident either. I've always had a great credit record too. But now I'm on Social Security, and it's hard to pay all the bills on time on a small fixed income. Now my credit score isn't great. I need to find cheap auto insurance? Will it cost me a lot of money to get car insurance with bad credit?

Answer: Sometimes life seems unfair. You've had a great credit record for decades, but when we get older and the monthly checks just don't stretch as far as they used to, it's pretty hard to keep up. But I'm afraid it's true that bad credit can affect your auto insurance rates.

More and more auto insurance companies are checking credit scores as part of the formula for setting insurance rates. Research has told them that your credit rating is a good predictor of how likely you are to file an insurance claim. A low credit rating could cost you more than having speeding tickets or accident claims on your record.

You might live in a state that requires insurance companies to at least tell you that your credit history has an effect on your insurance rates. More than half of the states in the U.S. have such a law. And that law might also say that a company can't refuse to insure you if your rating is low. But the sad truth is that if you can't pay your bills on time and keep your credit score healthy, you are probably going to pay more for car insurance with bad credit.

If you can repair your credit score by paying your bills on time, it will almost certainly lower your auto insurance rates. Shop around for the cheapest rates on car insurance, and ask the agent how the company weighs credit scores when setting premiums. Each company has a different formula. When you compare rates for auto insurance from several different companies, you're likely to save money on car insurance.

You can get car insurance with bad credit by paying your bills on time. You'll need to shop around for cheap auto insurance, since different companies use different formulas to assess risk and set insurance rates. When you compare rates for auto insurance, ask the companies how they weigh your credit score when setting your insurance rates.