When shopping for insurance, most people focus on coverage options, deductibles, and premiums. But did you know your credit history could also impact how much you pay? Many insurance companies use your credit-based insurance score to help determine your rates. Understanding how this works can save you money and help you get the best coverage possible.
How Credit History Affects Insurance Rates
Insurance companies assess risk when setting your premium. While factors like your driving record, claims history, and home condition play a role, many insurers also consider your credit score—especially for auto and home insurance. Studies show a connection between credit history and the likelihood of filing a claim, leading insurers to adjust rates accordingly.
Here’s how it works:
Higher Credit Score = Lower Premiums: If you have a strong credit score, insurers see you as a lower risk and reward you with better rates.
Lower Credit Score = Higher Premiums: A poor credit history may signal financial instability, which some insurers link to a higher chance of claims. As a result, your rates could increase.
Why Do Insurance Companies Check Credit?
You might be wondering—why does my credit matter for insurance? Insurance companies analyze data to predict risk and responsibility. People with higher credit scores tend to pay bills on time, maintain their homes and cars well, and file fewer claims. On the other hand, those with lower credit scores are statistically more likely to file claims, leading to higher rates.
Can You Get Insurance with Bad Credit?
Yes! A low credit score doesn’t mean you can’t get coverage. However, you might pay higher premiums or have fewer policy options. But don’t worry—there are ways to lower your rates:
Shop Around: Not all insurers weigh credit the same way. Compare multiple quotes to find the best deal.
Improve Your Credit: Pay bills on time, reduce debt, and check your credit report for errors.
Bundle Policies: Many insurers offer discounts when you combine home and auto insurance.
Take Control of Your Insurance Costs
Your credit history can influence your insurance rates, but you have the power to improve your score and find affordable coverage. Need expert guidance? Contact us today for a free quote and see how we can help you save!
Our experienced team of agents at Arthur Blake Insurance are awaiting to assist you! Our agents in Plano, TX can help answer all of your questions and ensure you receive the best premium coverage. Contact our agency here or call (972) 954-6383 to speak with a local agent today. Let us help you secure better coverage at a price you can afford!