Most people know that driving history and property value affect insurance rates. However, your credit score plays an even bigger role in determining your coverage cost.
Many insurers check your it along with other factors like location and claims history. Research shows that people with better credit scores file fewer claims and have smaller losses. So, insurers often offer lower premiums to those with excellent credit because they see them as less risky.
Here’s how it works:
- Higher Credit Score: Insurers see you as a lower-risk policyholder. This usually means you get better rates.
- Lower Credit Score: You may face higher premiums. Insurers think you pose a greater risk. People with poor credit tend to file more claims or miss payments.
Your credit score’s impact varies by state, insurer, and coverage type. Keeping a high value can save you money over time, even if a poor score raises your rates. To boost your score, pay debts on time, reduce your balances, and check your report for errors.
In short, your credit score directly affects your ability to get affordable insurance. It’s smart to improve and maintain your score if you want to save on coverage.
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