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Does Your Credit Score Affect Your Homeowners Insurance?

Insurance Agent Milwaukee WI

Written by Joseph Hoell, Business Owner

Updated on: May 5, 2020

Does Your Credit Score Affect Your Homeowners Insurance?

“Will my credit score change my insurance rates?” This is a common question we hear at Joseph Hoell Insurance Company in Germantown, WI. Many people don’t know the answer to this question and are surprised to learn credit is one of the factors impacting the price of their homeowners insurance.

Credit history is frequently used by insurance companies to set rates. Past financial information such as missed bill payments is analyzed to generate a credit-based insurance (CBI) score. A CBI score is a number to describe your overall credit stability to the insurance company. The exact formula varies from insurer to insurer. Depending on the insurance company and the state, bad credit may have no impact or can increase insurance rates by 30% or more.

Some things that may positively impact your CBI score include:

  • Long credit history
  • Several bank accounts in good standing
  • No late or missed payments
  • Low credit balances
  • Few new credit accounts

Some things that may negatively impact your CBI score include:

  • Past-due accounts
  • High use of available credit
  • Accounts in collection

It’s important to note insurance companies don’t continuously check, “pull” or monitor your credit. They only check when you first sign up or get an initial quote. When insurers do check your credit, it’s considered a “soft pull” and will not negatively affect your credit. If your credit score increases or decreases, your insurer doesn’t automatically know. If you’d like to request a “re-score” to take into account positive credit changes, contact your agent.

If you need help with homeowners insurance in Germantown, WI or the surrounding areas, contact us at Joseph Hoell Insurance for more information.

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