Insurance Providers Charging More for Bad or No Credit

Aug 06, 2015

Do you have bad credit or no credit at all? Well, be prepared to pay more when insuring your car or home or anything else that you’d like to insure. Insurance companies are charging more if you don’t have credit or if your credit score is poor.

A recent report by Wallet Hub shows that there are big differences in what insurance companies are charging Arizonians for the same coverage. And credit worthiness now plays a big role in what premiums you end up paying.

For example, the company found that State Farm charges $72.03 for a 37-year old single male who owns a 2009 Honda Accord LX four-door sedan which he drives for approximately 16,000 miles a year. That should be enough to buy the 50/100/50 liability coverage where $50,000 goes towards injuries caused to a single person, $100,000 goes towards injuries caused to more than one person, and $50,000 is set aside for damages caused to property of the aggrieved. You will also be covered should you get involved in a collision with an underinsured or uninsured motorist. Expect collision and comprehensive coverage with a $1,000 deductable.

However, Wallet Hub found that the same insurance company charged someone with the same needs but with no credit history up to $34.33 more. So, if you owned a similar 2009 Honda Accord LX and had the same insurance needs but had no credit history, you would end up paying $106.36 per year in premiums.

State Farm is a major insurance provider in Arizona with recent statistics from the Department of Insurance showing that it controls more than 15% of the $1.6 billion collected in premiums within the state for private passenger vehicle liability insurance.

However, it’s not just State Farm. The use of credit history when calculating premiums is used by almost all other insurance providers in the state. All State, another major player in the industry in Arizona asks for $121 a month for the same policy for people with good credit compared to $194 for people with no credit history. And another insurance provider, Farmers, is charging almost twice as much if you don’t have a credit history with those with good credit paying $95.90 while those with no credit histories paying $201.33.

It’s definitely a huge burden on people with bad or no credit history; which is probably one reason every merchant needs a bad credit merchant account. These accounts somehow protect you in case of bad credit.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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