InsuranceThought — Blogs About Insurance

An insurance company will use a variety of factors when determining your insurance credit score.

Some examples of those factors are the following:

• Public records: collections, bankruptcy, liens, foreclosures, etc.
• Past payment history: how many and how often you have made late payments.
• Number of open lines of credit: how many credit cards you have in your name.
• The type of credit you have: store credit cards, major credit cards, finance company loans, etc.
• Length of credit history: how long you’ve been in the credit system.
• Inquiries for credit: how many times you’ve applied for a new credit card, a mortgage loan, and the like.

Your insurance companies use various factors in determining your premium, so each quote will be slightly different and dependent on how they interpret your credit score. An insurance credit score encompasses many factors inclusive of your credit.

Since each insurance company will use its own techniques to determine your score, it’s difficult to say exactly what an excellent – or even good – credit score is, but generally, the better your credit score, the lower your premiums will be.

If you believe there might be incorrect information on your credit report, you should contact the credit bureaus. If you report an error, the credit bureau has to investigate the error and notify you of their findings within 30 days. You can also request that the bureau(s) send a notice of any corrections they make to creditor(s) or insurer(s) who have checked your credit during the past six months. When the errors have been corrected, request a new copy of your report several months later to verify that everything is now in order.

National credit bureau contact information is as follows:

• Equifax (800-685-1111)
• Trans Union (800-888-4213)
• Experian (888-397-3742)

Although small errors might not have much of an affect on your insurance credit score, large ones can make a significant difference in your premium. Some companies won’t be able to adjust your premium until your score is corrected, but, of course, it doesn’t hurt to ask! So, if you’ve taken steps to improve your credit, ask your insurance company to re-evaluate your credit score when you are up for renewal.