Does my credit affect how much I pay for insurance?

May 16, 2024

Credit can affect your insurance rate in a few different ways. Insurance companies may use your credit score as one of the factors to determine your risk profile as a policyholder. Generally, individuals with higher credit scores are seen as more financially responsible and are therefore considered lower risk to insure. This can result in lower insurance premiums for those with good credit.

On the other hand, individuals with lower credit scores may be seen as higher risk and may be charged higher premiums as a result. Insurers believe that those with lower credit scores are more likely to file insurance claims, leading to increased costs for the insurance company.

It’s important to note that the use of credit scores in insurance pricing varies by state and insurance company, as not all states allow insurers to use credit information when setting rates. Additionally, insurance companies typically consider a variety of factors when determining rates, so your credit score is just one piece of the puzzle.

If you have any additional questions about how your credit rate factors your premium, give us a call.