Your credit score is way more than just a number. It can make a difference to a lot of things that you might not expect it to…and one of those things is your home insurance rates. Sometimes it can be hard to find home insurance if you have a bad score, and sometimes it means you’re looking at a higher rate. If you’re worried that your credit score is making it difficult to find affordable home insurance, we’ll explain why your credit score matters to your home insurance and how you can get reasonably priced home insurance with less-than-ideal credit.
Does my credit score affect my home insurance?
Here’s the deal:
Some insurance companies use your credit score to come up with what’s known as an “insurance score.” (However, not all of them do.) This score can depend on several details about your credit, including:
- Your debt and how you’re paying it off
- Your credit history/How much credit history you have
- If you’ve paid your bills on time
- How many credit accounts/applications you have
Now. Why does this matter? Who cares about your insurance score? Well, the thing is that if you have a better insurance score (which may mean you have a stronger credit history) you’re seen as being less of a risk. So, because you’re less likely to file a claim, you might get lower rates.
On the other hand, though, if you have a poor insurance score (that might result from a rocky, less-favorable credit history) you’re seen as being a higher risk. And that means you could end up having higher rates.
Like we said, not every insurance company uses credit scores to calculate insurance rates. But it is possible that your credit score will play a part in your insurance rates.
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How to get homeowners insurance if you have bad credit
Well, unfortunately, there’s no simple answer to this question. But there are some things you can do to get back on track for affordable insurance rates. It might take some time, but these are our tips for getting home insurance with bad credit.
1. Go over your credit report carefully.
Since your credit report is kind of important when it comes to your credit history and score, it’s a good idea to check over it to see what’s going on. You can request one free credit report from each of the three credit-reporting bureaus (TransUnion, Experion, and Equifax) every year.
So, get out your fine-toothed comb and read over your report.
2. Try to improve your credit score.
By improving your credit score, you could give yourself a better chance of getting home insurance. It could also mean that you get a lower home insurance rate.
So, let’s go over some steps you can take to better your credit score.
- Pay bills on time. Late payments can hurt your credit score. Find a way to make sure you’re paying your bills by the due date, whether that’s setting up automatic payments or setting reminders on your phone.
- Keep your balances low. If you have a lot of debt, that can hurt your credit score.
- Try to refrain from using your credit cards.
- Pay off your debt. Try to manage your debt and pay it off rather than moving it around.
3. Shop around.
It’s important to get multiple quotes for your insurance and to go to several different companies. Home insurance companies evaluate risk differently. For example, a company may politely decline to insure you if you have something like a bankruptcy or foreclosure on your record. However, if you just have a not-great credit score, you might simply end up with higher insurance rates. Be sure to check out several companies. We here at InsuranceHub would love to help you with your insurance shopping.
Your credit score can influence your home insurance rates. It can even affect your eligibility to get insurance. But if you feel that your credit score is holding you back, try checking your credit report, improving your score, and shopping around.
If you’re looking to save money on your home insurance, our team of agents can help. We’ll shop around so you can get the best coverage at the best rate. To get home insurance quotes, all you have to do is fill out our online form or give us a call today.
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