Does Paying Car Insurance Improve Credit? 
Yes - by not impairing your credit score and profile . How can this occur ? When your auto insurance is cancelled or terminated for any reason it may have earned more premium than you paid . Your carrier will bill you for the additionally ` earned premium ' which is a legally collectible debt . If you do not pay this debt , their collection efforts will most likely show up in your credit report and history . Your credit ` profile ' is a significant factor that is considered in securing many things like insurance , financial contracts , loans , apartments , credit , etc. . Paying your debts -LRB- preventing collection activity which will be reported -RRB- definitely improves your credit by preventing it from getting worse . Do whatever you can to keep your credit score and profile as positive as possible . 