Improve Your Credit Score to Lower Your Homeowners Insurance Rates
Did you know that your credit score affects your homeowners insurance rates? It’s true. Your credit score affects virtually every financial aspect of your life, including your insurance rates on your home and car and personal belongings. So, how do you know if you have a good credit score, and how do you improve a poor one to lower your homeowners insurance rates? Read on for some tips that will help you.
Home Insurance
Do it First
Improving your credit score may not automatically improve your homeowners insurance rates if you already hold a policy. Because of this, you should do one of two things. First, once your credit score has gone from poor or average to excellent, call your insurance company to see if they’ll lower you homeowners insurance rates. If they don’t, you can start shopping around for new homeowners insurance policies; now that you have a better credit score, you may be able to get lower rates from other companies even if your company won’t change your rate.
Know Your Score
The first key to improving your credit score in order to lower your homeowners insurance rates is to know what your score actually is. Don’t pay to get your credit scores, though, as all three credit reporting companies � Experian, Equifax, and Transunion � are required to give you a free annual credit report. One good way to take advantage of this is to space out your free reports. For example, order an Equifax report on January 1st, an Experian report on May 1st, and a Transunion report on September 1st. That way, you’ll have an idea of what your score is every few months, and you’ll never have to pay to get it.
Your goal is to get your credit score above 750, but if you’re not there yet, don’t worry. You can significantly boost your credit score in just a few months by taking a few simple steps.
Pay Down Debt
Pay down your most dangerous, high-interest debt first. This is most likely your credit cards. If you have a lot of credit cards, try to pay down a few of the newer ones and then close the accounts. Don’t, however, close all your accounts, as part of your credit score is based on the longevity of your credit.
Pay Bills On Time
Paying your bills on time is a big part of having a great credit score. Ironically, though, late bills will affect a good score more dramatically than they’ll affect a bad score. If you have a score of above 700, one late bill might drop your score by 100 points, but it won’t affect a lower score all that much. Still, you’ll have a good credit score if you make it a habit to pay all your bills on time. Sign up for automatic bill pay if you have to!
Dispute Major Problems
Sometimes things are incorrectly reported on your credit report. Things to worry about include credit cards that don’t have the right limit reported because a bigger difference between your limit and your balance means a better credit score. You should also be quick to dispute any accounts that aren’t actually yours, and watch these closely, as they could be a sign that someone is tampering with your identity.
Home Insurance
These steps will help you improve you credit score, and once you have a higher score, you can get better homeowners insurance rates. It’s really not even that difficult to improve your homeowners insurance rates using simple steps like these.
