Many consumers understand the basic correlation between their credit score and credit history and their abilities to secure loans, credit cards, and more recently, even jobs. Conventional wisdom tells us the lower your score, the lower the chances for success when applying for any or all three. But did you know that a poor credit score can result in your auto insurer adjusting your premiums higher by calculating your credit scoring and history into the premiums they charge?

The practice of "credit scoring" or "insurance scoring" has been gaining more and more attention as auto insurers favor setting or adjusting a policyholders premiums based on personal credit scores and reporting. While the practice isn't full blown controversy, as it becomes more common, you're likely to hear more about it – or experience it yourself.

Why do insurance companies care about your credit score?

The reason is simple: insurance companies are constantly innovating and developing new ways to measure risk and how to calculate it into their pricing models. Over the last few years (not coincidentally as the averages of personal credit scores among Americans has plummeted over the last decade), empirical statistical evidence has suggested that a low credit score can directly relate to a higher risk profile as a driver.

Proponents for auto insurers that use credit scoring to calculate risk profiles, which include Allstate and many other big names, argue that a policyholder who is reckless with their bills by not paying on time (if at all) are likely to be reckless behind the wheel, too.

Major insurance companies today use the credit score factor in their models, among many other variables, and that's not likely to change unless some outside influence (new Congressional regulations, for example) are implemented.

The cards are already stacked against many Americans. As the direct result of the credit crunch a few years back, millions of people have lost their jobs and were forced into foreclosure. And in a decade where consumer personal credit spiraled wildly out of control, fueling massive value bubble in residential real estate, personal credit scores were desecrated for many Americans.

So what can you do to improve your credit score?

Now more than ever, it's essential that you pay your bills on time, consolidate and lower your personal exposure to outstanding credit, and resist any and all situations that require you to max out your credit limits. Be suspicious of debt consolidation companies that solicit you, as they are only out to make a buck off your misfortune; many require high up-front fees and produce minuscule results.

Stop by a website called Annual Credit Report, and find out what your credit score and history are. By law, you're eligible to review your report once a year for free by using this website. Review your history and keep a keen eye out for mistakes or areas that are in need of a correction, which is all too common. If you do have to make a correction, there's a process for that which is explained on the website (for example, removing a credit card blemish that is over seven years old).