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Can Your Credit Score Affect Your Homeowner’s Insurance Rates?

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August 25, 2022

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If you’ve ever bought a house, you know that the cost of homeowners insurance is often greater than you expected. Homeowners insurance is one of those expenses you don’t want to skimp on because you really need it when you need it. But it’s not just the cost of homeowners insurance that can be a surprise. It’s also the fact that your credit score can affect the cost of insurance. But how can your credit score affect your homeowner’s insurance rates? How does it affect your risk of insurance claims? And if you have bad credit, can you still get homeowners insurance? Keep reading to find out.

What Is Homeowners Insurance?

Homeowners insurance is a type of insurance that protects the owner and the owner’s property against a variety of risks, such as fire and earthquake damage and theft. You buy a homeowners policy from an insurance company that is applicable within a specific geographic area.

Homeowners insurance is a contract between you, as the homeowner, and the insurance company. You and the company agree to certain terms, such as the type and amount of coverage. The insurance company agrees to provide coverage as long as you pay your premiums on time.

Homeowners insurance is also known as a dwelling policy, dwelling insurance, and homeownership insurance.

What Is the Connection Between Homeowner’s Insurance and an Insurance Rate

Credit scores aren’t the same as insurance rates. An insurance rate reflects your risk as an insurance consumer. A credit score is a rating of your financial responsibility.

But there’s a connection between your credit score and insurance rate. If your credit score is low, your insurance score will be lower because the insurance company views you as more likely to have problems, claims, or an inability to make timely payments.

In fact, one of the most significant factors in determining your insurance rate is your credit score.

How to Improve Your Credit Score

A good credit score will help you obtain a competitive home insurance rate. What can you do to get a good credit score? You can start by following these four tips:

1. Pay Your Bills on Time

Payment history is the biggest variable that impacts credit scores, and late payments can stay on your credit reports for several years. 

2. Don’t Borrow More Than You Can Afford to Pay Back

When you take on too much debt, you’ll load yourself down with payments. Make sure you have enough income to keep up with your monthly payments.

3. Don’t Apply for Too Many Credit Cards

Applying for too many credit cards can hurt your credit score. It’s important to keep your credit card accounts open and only apply for one card at a time.

4. Consider Debt Repayment or Restructuring

If you’re having trouble paying your debts, consider negotiating with your lenders to enter into a repayment or restructuring plan. This plan will give you an organized way to repay a renegotiated pack of debts.

Get the Best Rate on Your Homeowner’s Insurance

Homeowner’s insurance is crucial to protecting you and your family physically and financially. No matter your credit, if you’re looking for a quality homeowner’s policy, contact Magnolia Insurance Agency. Call our Georgia office at 770-213-5171 or contact us online! Our expert agents will walk you through your options and get you the best available rates.

Homeowners Insurance / By Magnolia Insurance Agency


Contact Us Today – 770-213-5171

Stephen Dufour
Owner, Magnolia Insurance Agency
Office: 770-213-5171
Fax: 770-338-6932

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