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Your Credit Score Can Affect Your Insurance Premiums

Rick Braile

April 19, 2024

A good credit score can not only help you get favorable interest rates on loans, it can also help to you get better pricing on auto and homeowner insurance.  In many states including New York, insurance companies may use a person’s credit score as a rating factor in determining premiums for insurance the same way they use factors such as driving record, age and vehicle use.


Although there is some disagreement as to whether or not this practice is fair, insurers have determined that there is a correlation between good credit and good claims experience. Several of the insurance companies represented by the Bay Harbour Insurance Agency use credit score in policy pricing and it can make a significant difference in the price of a policy.


There are several things you can do if you feel that your credit score is causing high premiums. One action you can take if you’re married or have a domestic partner is to have the representative who’s rating your policy run the credit scores on each of the partners and use the best one. Another solution is to have the representative run quotes with several companies including those that don’t use credit score (at Bay Harbour we routinely quote policies with all of the companies we represent). Finally, you can contact the three credit rating agencies and ask for a free copy of your report. Pay down credit card debt that appears and increase your score.


Finally, we should clarify that insurance companies actually use “insurance scores” instead of credit scores as policy rating factors however insurance scores are based on one’s credit scores. You should also know that these scores count as a “soft hit” with the credit rating agencies.


If you have any questions on the use of credit scores as it relates to insurance pricing feel free to reach out.

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