Credit scores are used by most home insurers to determine the risk of insuring a home. If your credit score is low, you might have to pay higher premiums or even be denied coverage altogether. Your credit score is determined by a number of factors, such as how long you’ve had credit, and how difficult it is to obtain credit from various sources.
If you want to better your credit score, you should make it a priority to reimburse your bills on time and maintain a low balance on any credit cards you have. Reducing hard inquiries on your report can also help. For expert advice, consult with Magic City Insurance Group LLC in Birmingham, AL.
Credit Scores’ Affect On Home Insurance Rates
You’re probably wondering how one piece of data can have such a large impact on your financial future. Well, it’s true — your credit score is the most important factor when it comes to getting a good deal on your home insurance. The average US homeowner has a credit score of around 640, which puts them in the “low-risk” category.
Homeowners in this category have the best chance of getting the lowest rates when they are looking to renew their home insurance. Keep your credit utilization low by closing open accounts, and keeping your credit utilization below 30%. Be careful with new applications, as they may report your old credit history. And finally, keep your credit active.
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Credit scores are used by insurance companies to determine your risk and how much you should pay for a policy. If you have a higher credit score, then you’re considered less of a risk to the insurance company and can expect to pay less for your home insurance premiums. If your credit score is low, your rates will also be higher because the insurance company sees you as a risk. For inquiries in Birmingham, AL, give us a call at Magic City Insurance Group LLC.