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New Jersey Drivers at the bottom of the credit heap file 40-percent more claims than drivers at the top of the credit heap, according to a study by the Insurance Information Institute.

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Consequently, having black marks on your credit report could really bump up your auto insurance rates.

"A NJ consumer with bad credit is going to pay 20- to 50-percent more in auto insurance premiums than a person who has good credit," says Clarence Smith, assistant vice-president at Conning & Co.

On the flip side, if you have sparkling credit you could land lower insurance rates by shopping around.

Here's why. Most auto insurance companies use credit data when underwriting new customers. Far fewer, just 14 percent of the nation's largest insurers, use credit data on contract renewals. And some states don't allow this practice at all.

So if you've been with your NJ auto insurer for a while, there's a good chance your shiny credit record could land you a lower insurance rate at another company.

"Obviously, consumers with good credit are going to be in the best possible position,"

"If you know you have good credit, you may want to shop around. Even with an accident, you could qualify as a preferred customer with some insurance companies."

A study by the Casualty Actuarial Society shows that people with prior driving violations or accidents and good credit have much better loss ratios than people with clean driving records and a bad credit history.

New jersey auto insurers price policies based on a customer's potential to file a future claim. So someone with a flawed driving record and clean credit record could actually end up paying less for auto insurance than someone with a spotless driving record and a spotty credit record.

Credit isn't the main driver
Keep in mind, a credit record is just one of several factors that an auto insurer considers when pricing your policy. Other factors include your age, the type of car you drive, how many miles you drive and whether you live in an urban or rural area.

Just how big an impact your credit record has on your auto insurance bill varies based on the state you live in and the insurance company you choose.

"Good credit at one company may not be a good insurance score at another company" "That's why it's important to shop."

Insurance is regulated at the state level. Some states allow auto insurers to use credit data in the approval process. Others allow insurers to use credit data when determining what rate class a driver falls into. Some use it for both.

For more information, contact the insurance department in your state. This map from the National Association of Insurance Commissioners links to each state's insurance department.

Insurance score secrets
Your New Jersey auto insurance company doesn't actually peek at your credit report. Instead, it receives an insurance score from a credit bureau based on the information in your credit record.

Fair, Isaac and Co. provides the credit bureaus with the formulas to crunch insurance scores. Some insurance companies have their own scoring models.

Like a credit score, an insurance score is based on information found in a consumer's credit file. But the formulas used to arrive at the two types of scores are quite different.

"An insurance score is going to be less concerned with your propensity to take on new credit and more interested in how long you've been managing credit".

"Insurance scores focus on issues of stability."

Curious about your insurance score? Good luck finding out. Insurance companies aren't required to tell, and few do.

Even if you could find out your insurance score, it might not be all that helpful. Yes, it could give you a sense of how a single auto insurer rates your credit record, but that's it.

When it comes to insurance scores, there's no uniform standard. So another insurance company, using another scoring model, could assign you a different insurance score and offer you vastly different rates.

The key thing to realize is your credit record does affect the cost of your auto insurance.

If you're having credit problems, it's best to stick with your current auto insurer until your credit record improves. If you must shop for a new auto policy, ask the insurer if they use credit data in their decision-making process. Not all insurance companies do.

You may be better off doing business with a company that doesn't use credit data when underwriting new customers.

It's also a good idea to check your credit report before shopping for auto insurance.