Many people are unaware their credit history may strongly influence the cost of homeowners insurance. A poor credit score can result not only in higher insurance premiums but also in a denial of coverage altogether.
As credit lending standards continue to tighten, experts agree that it is more important than ever to keep a close eye on your credit score in order to avoid insurance rate increases or non-renewal of policies.
Why It Counts
The most commonly cited reason behind charging higher insurance premiums to those with lower credit scores is the belief that people who do not properly manage their finances are at greater risk of submitting a claim.
Visit www.annualcreditreport.com to order your free annual credit report. Review the information for accuracy and immediately dispute any errors in writing. Not only will it help save money on the cost of obtaining a new loan, but it might help keep your homeowners insurance rates low.
Keep an eye on credit limits, late payments and other common credit problems. Lenders throughout the nation are reducing credit lines, increasing minimum payments and requiring higher credit scores. Smart consumers should make a point of keeping an eye on available credit and avoiding late payments, over the credit limits or other common problems.