Can My Credit Score Affect My Homeowners Insurance Rate?

The companies that make a profit from your “history with money” will dig up your credit score one way or another. If your ratings in particular areas are good, you get plenty of benefits. However, if one of these records is in poor shape or is unsatisfactory, it becomes challenging to invest in property, buy a car, or even find a reasonable insurance policy.

Your credit score rating will dictate a lot of the decisions you make and your purchases. In fact, it can even affect the rates you pay on your insurance.

Do Credit Scores Affect Homeowners Insurance Rates?

Credit-based insurance scores aren’t very different from typical credit scores. Over time, these scores have been altered and refined.

These days companies utilize specific components of an individual’s credit score to determine how an applicant would deal with an incurable loss. Here are some percentages that show how some factors can influence the final scores.

  • Payment history (40 percent): It’s the most critical factor reflecting how responsible you are in paying off your outstanding debt.
  • Credit history length (15 percent): If you have an extended period of money management, it’s a plus for you.
  • Outstanding debt (30 percent): This demonstrates if the credit score is over-extended.
  • Credit mix (5 percent): A good mix of car loans, mortgages, credit cards, and other loans can be a positive indicator.
  • Opening of new credit line (10 percent): Opening many new credit lines in a specific period indicates risk.


You can see from the chart below that people with poor credit scores are paying almost two to three times higher for homeowners insurance compared to those with an excellent score.

It’s worth mentioning that there isn’t a dramatic difference between the average and excellent scores. But if you have a poor score, below 580 or somewhere near, can have a significant impact on your overall rates.

So, the answer is YES! Your poor credit score can definitely result in you paying thousands of dollars more in insurance. As with anything insurance related, the state you live in makes a huge difference.  Some states don’t allow credit to be a factor for insurance rates.


Credit Scores       Poor Average Excellent
Rates       $2,870             $1,433           $1,125

Can You Boost Credit Scores to Reduce Home Insurance Rates?

As mentioned above, your credit score plays an essential role in finding affordable home insurance. If you make a consistent effort to improve or upgrade your credit score, it will have a positive impact on your homeowners insurance rates.

Here are some ways you could improve it:

  • Order a full credit report
  • Assess the report for any errors
  • Pay household bills and credit card statements on time (if necessary set up automatic payments with your bank)
  • Avoid surpassing your credit limit

Summing Up

All in all, your credit-based insurance score influences your homeowners insurance rate. When they aren’t up to the mark, they can be obstacles that prevent you from making important purchases. You can avoid this by taking charge of your monthly bills and not going over your credit card limit.

Talk with a homeowners insurance expert today who can get you multiple quotes from some of the nation’s top carriers. We enjoy giving you discounts, so talk with an agent to see what you can do to earn lower insurance rates.


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