Your Credit Score and How It Relates To Insurance (4)

When shopping for Auto or Home Insurance you will want to know if an Insurance company will be using a credit score to determine if they will offer you insurance or offer you insurance at a higher premium based on your credit score. When getting insurance quotes it is very important to have all the vital information to provide the agent or company in order to receive an accurate quote.

Insurance customers should always feel free to ask questions about the companies an agent represents. In the area of insurance credit scoring these are some of the questions I ask:

  • Does the agent or company use credit information for underwriting and rating?
  • If credit history is used for underwriting, ask how it affects your eligibility for coverage?
  • If credit history is used for rating, ask how it affects your insurance premium?
  • Ask if they will check the credit history of other people insured on your policy, such as family members, and how they will affect your policy?
  • Will the agent or company use credit information for future renewals of the policy?
  • If you don’t have a credit history, ask if this will affect your insurance purchase?

Sometimes an insurance company will find “no hits” or “no score”, which means they can’t find a meaningful credit history for you. If you know you have a credit history but the insurer can’t find it, be sure your agent or insurance company has your correct name, address, social security number and birth date.

Often, people worry about shopping for quotes and having inquires show up on their credit reports. Frequent and recent inquires for new credit often lowers both the consumer credit score and the insurance credit scores, but insurance inquiries do not appear on your credit history as inquires for new credit. Shopping for fair and good auto and homeowner insurance will not damage your credit score in any way. These inquires are listed on a persons credit history in a separate category and not as new credit applications. It often, does save you money when you shop and compare insurance coverages and premiums.

Point Other Blogs in this series:

Glossary of Insurance Terms:

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