Can your credit score affect the cost of your home insurance policy? In most states, the answer is yes.
According to FICO, about 90% of home insurers use credit-based insurance scores in state that allow it. Numerous studies show there is a statistical correlation between a person’s credit history and the likelihood that person will file an insurance claim.
Insurance companies using a credit score as a rating factor use data provided by the major credit bureaus, which include Equifax, Experian, and TransUnion. Factors may include outstanding debt, length of credit history, late payments, collections, bankruptcies, and applications for new credit.
Other types of insurance, such as personal auto insurance, may also use your credit score as a factor in setting a rate.
Adequate management of personal finances is the key to managing credit, but another important step is monitoring the data used by the major credit bureaus for accuracy. To do so, visit their websites. For information about a free report, visit the website of the Federal Trade Commission at https://www.ftc.gov/.Reprinted by permission, The Mines Press, Inc. Volume 45, Issue 2. Insurance products are not a deposit, not FDIC insured, not insured by any government agency, carry no bank guarantee, and may go down in value.