Insurance Score...

WHAT IS AN INSURANCE SCORE AND HOW DOES IT AFFECT MY RATE?

A credit based insurance score is an evaluation of credit bureau information that gives the insurance company an estimation of your future risk, compared to other consumers. The better your score the better your rate. Having an above average insurance score can help you save thousands while you obtain insurance throughout your lifetime. A customer can receive a quote without an insurance score. Take into consideration that it is just a quote. Before the auto, home, business, etc. policy is issued, an insurance score is obtained and may raise your premium.

Please remember that improving your insurance score may not neccesarily decrease your rate. Other criteria are taken into consideration, such as claim history, driving records, etc. Without going into a vast amount of insurance jargon here are some ways to help you understand what an insurance score consists of:

• 40% Previous Credit Performance
• 30% Current Level of Indebtness
• 15% Length of Credit History
• 10% New Credit/ Pursuit of New Credit
•   5% Type of Credit Used

You can improve your insurance score by:

• Paying your bills on time
• If you have missed payments, get current and stay crrent
• Be aware that paying off a collection account will not remove it from your credit report
• If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor
• Manage credit card use carefully
• Do your rate shopping for a given loan within a focused period of time
• Know that it is okay to obtain a copy of your credit report

By familiarizing yourself with  these simple steps, it will help you to understand the use of insurance scoring.

The intended use of this blog is for information purposes only, and should not be used as legal advice. Please consult a credit couselor, lawyer, or financial consultant for a specific plan of action.