Credit based Insurance scores

How does Credit Affect Your Insurance Rates?

   Your credit score is run any time you shop for a home or auto loan, rent a home or apt. And your credit is run when you shop for Insurance.  Keep in mind, your "Insurance score" is different than your "Credit score". Your credit score will be based on your credit history and a few other factors, like your income. Insurance carriers will take your credit information and put it into a model with many other factors, like payment history, bankruptcies, collections and the amount of credit you have incurred.  For example if you have never been late on your mortgage payment, you have a better insurance score than someone who pays late. If you have "maxed out" your credit cards, you will have a lower insurance score than someone who pays them off each month.
  Your credit score can tell someone how responsible you are.  Studies at both the federal and state level, have show your credit score correlates with the probability of an Insurance loss. The higher the Insurance score, the lower the risk, so the lower the rates. Now, other factors are included in Insurance rates- where you live, are you married, your age, male or female. Insurance carriers have several rating "Tiers" customers are placed into based on the details of their lives. Then you factor in claims history. Then the type of car or the construction of the home. So many things affect your rates, but it does start with your Insurance score. 
Insurance scores do NOT consider the following in their assessment:
*Income                                       *Disability
*Ethnic Group                             *Nationality
*Religion
   Insurance carriers will use at least one of three credit bureaus to request your credit history:
*Experian
*TransUnion
*Equifax

You are entitled to one free credit report a year. Contact one of the above bureaus to get your report. You have the right to dispute any discrepancies. The bureau is required by law to correct any errors. If you are ever denied Insurance coverage, based on your credit information, you are entitled to a free report from the bureau that provided the information to the carrier.
   Bottom line, Yes- your credit can affect your insurance premiums. Just one more reason to pay bills on time and keep credit card balances low. You can fix your credit or you can build a good credit history from scratch.  
Your credit is important. Know what your score is and keep it high!