So you are a great driver with few, or maybe no, traffic tickets on your driving record. Your insurance should be reasonable for all intents and purposes. At least this is what an insurance layperson would think…right?
In recent years, insurance companies have begun to count the cost of of insuring a client. Risk versus rate of return is a determining factor in the mind of insurers, as they browse your credit history to determine how much of a “risk” you will bring to their table in the long run.
According to Wikipedia, an insurance score, also called an insurance credit score, is strictly used to predict risk. By numerically compiling credit history with mathematical equations, a process unknown to the end-user (that would be you), the insurer is more prepared to make an informed decision as to whether to accept a client as an insured, hike their insurance rates, or offer lower rates in some cases.
At any rate (no pun intended), if you are seeking insurance, or reevaluating your present insurance carrier, you should be aware of various ways to lower your insurance score risk factor. Here are a few of our suggestions:
1. Pay Bills by Due Date
2. Monitor Debt to Income Ratio
3. Stop Applying for More Credit Cards!
4. Keep All Credit Applications to a Minimum
5. Maintain at Least 25% Remaining Credit on Your Credit Card or Line of Credit
6. Develop a Strong Relationship with Your Insurance Agent (This will assist in obtaining knowledge about your insurance score and how to improve.)
7. Shop Local for Reputable Insurance Agencies (This will allow you to form a stronger relationship with your agent)
8. Pull Your Credit Report Periodically to Offset Line Items