Insurance companies commonly use a driver's credit score to determine the likelihood of an insurance claim. Although your credit score can affect your auto insurance rates, paying it doesn't help improve your credit score. Auto insurance companies don't regularly report to the credit bureaus each month, which means your credit file won't reflect the positive account history.

Auto Insurance and Credit

For an account to boost your credit score, the creditor must report the payment history to a credit bureau. Credit cards, loans and mortgages appear on your credit report. Utilities, rent and car insurance companies don't report payments to the bureaus. Although these companies aren't reporting your positive account history, your credit score will suffer if the accounts become delinquent. Insurance companies will cancel your policy after a missed payment, but an unpaid balance is typically sent to collections. Not only will your credit score suffer, but a lapse in coverage increases your rates in the future.