Credit Score Affects Insurance Premiums

March 16, 2018

A lot of people may not be aware of this, but an individual’s credit score affects insurance premiums. How come? Because a person’s credit rating is a numeric reflection of a person’s level of financial responsibility and behaviour. Higher credit scores, in combination with good records, can help lower insurance premiums.

Here are just a few ways that you can save on your car or home insurance premium by maintaining a healthy credit score:

  1. Pay your bills on time: One of the easiest steps to take to maintain your credit score is to pay your bills on time. Even the smallest of fines could end up on your credit report and count against your score.
  2. Keep your credit card balances low: It is recommended that you have not more than three credit cards and ensure that your credit card balances are always within 30% of their limit. The same rule of thumb applies for loans and another form of debt. If you know that you’re not responsible with your credit card, use your debit card for purchases instead.
  3. Do not close old credit cards: A large part of your credit score is calculated based on the length of time that you have held that card for. The longer you have held a credit card with a healthy balance, the better your credit score will be!

It is also important to check your credit score once a year to ensure its full accuracy. If you notice any inaccuracies it is important to dispute them right away. These are just some quick ways that you can maintain a healthy credit score.

If you’re looking for more ways to save on home and car insurance, talk to one of our team members. We’ll help you navigate your insurance.

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