Homeowner’s Insurance and Your Credit HistoryBy Terri Woods – Terri sells real estate in Santa Cruz County and North Monterey County
Did you know that the lender is not the only one who looks at your credit score when buying a home? Unless you have recently purchased a home or refinanced the home you are currently living in, you may not be aware that insurance companies are now looking at credit scores. Insurance companies have learned that a person’s credit history is an accurate predictor of risk. According to Insurance Information Institute actuarial studies have shown that people with a low credit score are more likely to file a claim. Since insurance companies base their premiums according to the risk they are assuming, the lower the credit score, the higher the risk.
So, for those of you with excellent credit, congratulations! You reap the rewards of a lower premium.
For those of you whose credit scores are sub-standard, there are a few steps that you can take to assist in a lower homeowner’s insurance premium.
- Repair your credit. Before you go cutting up those credit cards, you may want to Google some tips on ‘how’ to repair your credit.
- Shop lenders. Lenders do vary in interest rates, points and fees.
- Consider raising your deductible. Of course, a higher deductible has to make sense in your financial situation.
For more information, contact me for my FREE Home buying eBook for SMART BUYERS.
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