Does Credit Affect Your Insurance Rates? Yes, but Why?
Does Credit Affect Your Insurance Rates? In short, the answer is yes. Your credit can affect a lot in your life financially. A high credit score can mean getting approved for a loan with low interest rates. Your credit health can actually affect the amount you pay in premiums whether it be, homeowners insurance, car insurance, or life insurance. Just like lenders, insurance companies want to know how much a gamble they are taking by before accepting new customers.
Usually, they will look at your history to quote appropriate rates. If your score says that you are not always responsible with your other bills, that factor can make you a higher liability to the insurance company.
Studies have even shown that customers with poor credit sometimes pay 91% more in insurance compared to customers with healthy credit. Not every aspect of your credit report is useful for getting a quote. Certain details are compiled and then calculated together into a credit based insurance score. Unfortunately, these scores are not made available to the general public. Some factors could be your payment history, your debt ratio, long credit history, no late payments and low credit usage.
Unlike the lender, an insurer does not consider income, and job history. This all does not mean you will get denied insurance because you have poor credit, but your insurance rates could be high. Let’s explore how your insurance score can affect different types of insurance. The credit score can impact car insurance rates in a large way. A surgery found that a family with poor credit can pay up to $2,090 more to insure just two cars versus a family with great credit.
Does Credit Affect Your Insurance Rates? Homeowners Insurance
Homeowners with fair credit can sometimes pay up to a third more on their homeowners premiums. Your credit report is usually checked when acquiring a life insurance quote. Things like filing bankruptcy within 12 months can cause you to be denied a policy. Keeping your credit score in the up and up is always important and sometimes fundamental for life. Taking steps to manage your finances, and credit score can lead to a better insurance rate. After all, who doesn’t want to save money?
Q1: How does credit affect insurance rates?
Credit can impact insurance rates. Insurers may use credit-based insurance scores to assess risk. People with higher scores may qualify for lower rates.
Q2: Can I get insurance with bad credit?
Yes, you can still get insurance with bad credit. However, you may face higher premiums. To discuss your options, call us at 1.888.445.2793.
Q3: How can I improve my credit for better insurance rates?
To improve your credit, pay bills on time, reduce outstanding debt, and review your credit report for errors. Over time, these actions may lead to better insurance rates.
Feel free to ask any of our live agents to give you a quote.
Does Credit Affect Your Insurance Rates? Yes, but there’s more to it that just your credit score. Click Here for more information.
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Last Updated on by Camron Moss