Car Insurance - Upfront or Monthly

HelloWonderful

Hi,

I am after a bit of advice. My insurance renewal is due to come up this month. I am in a position to pay it outright but I am unsure if this is the best thing to do in regards to building up a credit score? 

molerat

Paying monthly is generally more expensive than paying up front in full.  Never pay extra to boost your mythical credit score.  Simply make sure you keep all your current reportable accounts in good status.  The easiest no cost way to boost your credit status is to open a credit card or two and spend as you would normally paying off in full each month.

[Deleted User]

Always pay it outright. Your credit score has no bearing on your credit worthiness or anything else, but paying monthly just means you're giving away money.

Build credit history via a credit card or phone contract.

HelloWonderful

So in theory would I be better off taking out a credit card (I’ve never had one), paying the insurance off on the card and then paying the card off outright? 

[Deleted User]

Not just in theory, but in reality also.

But if you can get a credit card, make sure you understand how it works and set up a DD to clear in full each month.

HelloWonderful

Thanks zx81. I’ve been a bit naive regarding credit scoring. I have made some big purchases recent years but not thought of using a credit card as I’ve always had the money available to buy outright.