Will My Car Accident Affect My Credit Score?
You may be wondering if your recent car crash is going to affect your credit score. The short answer is No. According to Experian, your credit report will not be affected by a car crash.
A car accident is not going to affect your credit score because driving is not listed on your credit report. Your credit score is determined by the things listed on your credit report. Those include any bankruptcies you may have had, any loans you may have taken out and have paid back, any credit cards you may have or have had. It also includes a list of different bills and whether or not you have paid them on time or late among other things.
Your driving record is not part of your credit report. Neither is your insurance premium. However, your credit score can be affected by the financial fall out of an automobile accident.
Suppose you total your vehicle, it was uninsured, and you had a lien (auto loan) on the title. You will have to pay back the money you borrowed. The loan is not going to go away. You will have to pay it and comply with the terms of your loan agreement accident or no accident. Defaulting on that loan will damage your credit score
If the vehicle was insured, you may make a claim under your own insurance policy, and they may help you pay off the loan after the car accident. That is how most people protect themselves from financial injury after an accident.
The second way a car accident can affect your credit score is liability. If you are responsible for an accident, and the other party sues you and gets a judgment against you stating that you owe them damages. That can be construed as debt, and affect your credit. The safest way to protect yourself in this situation is to carry liability insurance as required by law. Your insurance policy can cover and pay for the damages from the judgment.