Credit Score Can Impact Insurance Rates
Your credit score impacts many elements of your life, but did you know that it can also impact your insurance premiums? If you answered no, you are just like two-thirds of consumers surveyed by the Government Accountability Office. According to Consumer Reports, auto insurers will look at your credit score in order to determine the likelihood that you will file a claim. If they feel your credit score is not up to their standards, they could charge you more, even if you have never been in an accident before. Consumer Reports estimates that a poor credit score could increase your insurance premium by as much as $1,301 on average.
How Do Insurance Companies Compute A Score?
According to Bankrate, insurers compute a score for you between 300 and 997 based upon your claims history and credit components. Those who score 700 and above are considered to have good credit scores, and those who score above 800 are considered to have great scores. So the lower your score is, the higher you will pay in insurance premiums. Consumer Reports states that the average difference paid by drivers with a good score compared to drivers with the best score is $214. To see individual Florida statistics, click here.
Your credit score can influence other types of insurance rates including:
- Home Insurance: Bankrate advises that people with fair credit on average pay 32% more for homeowners insurance, and those with poor credit pay nearly two times more than people with excellent credit.
- Health Insurance: The good news is that health insurers won’t take too hard of a look at your credit score. However, they are interested in knowing if you pay your bills, as this is a good indication on if you will pay your premiums. Bankrate states that research has shown there is a correlation between your physical and financial health. Bankrate concludes, “Those who fail to take care of their money pose a greater risk to themselves (and hence, their health insurer) than those who do.”
- Life Insurance: Some life insurance companies will lower your rate if you prove to be a responsible borrower, according to Bankrate. If you improve your finances in the future, it isn’t a bad idea to ask your life insurance provider to re-rate you. As previously stated, good financial health can be correlated to good physical health.
How To Improve Your Credit Score
There are many ways that you can improve your credit score:
- Pay your bills on time
- Use your credit card for routine purchases
- Sign up for BillPayer to help you better manage your finances. With BillPayer you can set up automatic payments in order to avoid late fees.
- Make frequent payments. Try to make weekly or bi-weekly payments in order to build your credit faster.
- For more tips on how to improve your credit score, click here.
© Copyright 2016 Launch Federal Credit Union. All Rights Reserved
- 5 Tips to Prepare for a Hurricane
- 6 Tips for Back to School
- Should You Buy A New Or Old Home?
- Will Refinancing Your Auto Loan Hurt Your Credit Score?
- How To Do Valentine’s Day On A Budget
- Top 5 Ways To Save For A Car
- 10 Ways To Improve Your Finances In 2019
- 4 Best Ways To Budget For A Baby
- How To Overcome Impulse Purchases
- What Items Should You Inspect When Buying A House?
- How To Save Money On Holiday Shopping In 2019
- Four Ways A Personal Loan Can Help You Through A Difficult Time
- What Is Credit Utilization & How Does It Impact Credit Score?
- Why You Should Consider Refinancing Your Car Loan
- 5 Boat Buying Tips For A First Time Buyer
- Top 8 First Time RV Buyer Mistakes To Avoid
- 4 Tips To Help You Save Money This Halloween
- Prepare Your Vehicle For Hurricane Season
- Top 4 Car Buying Mistakes To Avoid
- Why Car Loan Rate & Term Matter
- August 2019
- February 2019
- January 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
- December 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- December 2016
- November 2016
- September 2016
- August 2016
- July 2016
- June 2016
- May 2016
- April 2016
- March 2016
- February 2016
- January 2016
- December 2015
- November 2015
- October 2015
- September 2015
- August 2015
- July 2015