Credit & Insurance

The insurance industry’s perspective concerning credit and the premiums you will pay:

When it comes to credit, it is a common practice to use credit to assess exposure and risk. When you are applying for a mortgage, an auto loan or a place to rent, it is called a hard credit check. The insurance industry uses what is called a soft credit check which accesses only your score and does not reflect as a negative inquiry on your credit report.

The insurance company collectively establishes your premiums based on factors such as your credit, driving record, vehicles you drive, and your driving age. The industry takes low credit scores into consideration, if you are struggling to pay your bills, you may be challenged to keep up on the maintenance of your home or your vehicle. So, today, you can have two families with the exact same profile (where they live, type of vehicles they drive and age) and they both will pay different premium prices based on their credit.

Insurance policies are designed to protect you from catastrophic and unforeseen events.

An expressed concern from the industry is that insurance has become more like maintenance policies. As an example, the insurance company has discovered that when they send a claim adjuster out to assess a roof, they often find the home in some-sort of dis-repair. In a number of cases, they found the roof should have been replaced anywhere from a year to five years prior to a claim. The average roof has a lifespan of 20 years.

Just as a lower score for loans equates to higher interest rates, a lower score for insurance equates to higher premiums. No matter what way you look at it, a low score means you are paying more money.

It is always the quest of the consumer to save money on insurance and your credit is one of the largest factors.

Here are some resources to guide you on your quest
and make sure your credit score if giving you the best rates.

Know what is going on with your credit:

Target is offering free credit monitoring to their customers for a full year. If you are a Target customer, you will need to request your free activation code before April 24, 2014.

Experts who can help you assess your credit.

Check your credit report at:

Free Transunion Credit Report:

Free Experian Credit Report: