Can A Credit Score Affect Homeowners Insurance Rates?
Yes. Your credit score can affect your homeowners insurance rates. High credit scores typically translate to cheaper homeowners insurance rates. Close to 85% of home insurance companies use customer credit-based insurance scores (also known as CBI scores) when calculating homeowners insurance rates according to FICO.
How Does It Affect My Rates?
Credit scores range between 300 to 850. The higher your credit score, the lower risk you are perceived to be by carriers, which results in more favorable rates. Customers with good or excellent credit scores could save 20% or more on their homeowners insurance premiums.
How Do I Improve My Credit Score?
- Check credit report for errors
- Pay Bills on time
- Reduce overall debt balance
- Apply for new credit accounts only as needed
Finally, you should keep in mind that most states generally permit using insurance scores as a factor for determining premiums. However, some states prohibit its use. Make sure you go and check your state insurance department so you have a better understanding as it relates to the factors insurance carriers use to determine your insurance rates.