Credit-Based Insurance Scores

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Insurance companies can use varying factors to determine what you pay for your insurance. These factors include your driving record, type of car, age, location and in most cases, your credit-based insurance score. In fact, variations in insurance score can cause the cost of insurance to fluctuate upwards of 200-250% the lowest rate. In dollar figures that means a person with a good insurance score may pay $750 for their insurance while someone with a poor score could pay as much as $1800 or more for the same policy. 

 

Credit-Based Insurance Score? What is it and Why Does it Matter?

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Insurance Score is related to your regular credit score, but is not the same thing. It is not a measure of credit worthiness but rather it measures the likelihood that you will have a claim. It is a number that matters greatly when determining your insurance premium, both Home and Auto. Insurance companies believe that those with a higher score will have fewer claims and that those with lower scores will likely have more claims. 

 

Personal credit history will definitely affect your insurance score. It is important to review your personal credit report and do what you can to get your personal credit score as high as possible to help you keep your insurance premiums low.

 


Some factors that are used by insurers to determine your insurance score.

 

1  Length of credit history

2  Number of open accounts

3  Collections

4  Bankruptcies

5  New applications for credit

6  Ratio of available credit to debt outstanding

7  Late Payments

 

State Rules Vary

States have rules about how credit information can be used in insurance. Contact your state's Department of Insurance for the latest information on your state's rules. In Ohio you can call 614-644-2658 or visit insurance.gov  

Credit Report Errors

If your credit record is incomplete or has an error, ask the credit reporting bureau to make the corrections. Use these links to help you review and monitor your credit score. - Equifax, Experian and TransUnion.


To find out how your score affects your Home and Auto insurance premiums you can give us a call at 937-962-2123 or visit our Get a Quote Pages, AUTO QUOTE or HOME QUOTE.

Mae Ceniza