Know your credit history and how it affects your insurance
You’re probably aware that banks and other financial institutions are interested in people’s creditworthiness, but did you know that insurance companies consider a potential policy holder’s credit score, too?
Your credit score is a measure of confidence in your ability to manage your financial affairs: if you have a good credit score your applications for credit cards and loans are likely to be successful. If you have had some financial difficulties in the past, or have been late in paying regular bills, your credit score will have slipped and it won’t be so easy to get credit from financial institutions.
Statisticians and financial analysts working for insurance companies have found that there is a statistical link between a person’s credit score and the likelihood of their filing insurance claims. Insurers have developed a system of insurance scores, based on credit scores and other financial and insurance data.
Insurers use insurance scores to assess the levels of insurance premiums. A person who has a poor insurance score is considered to be a higher insurance risk and will pay higher premiums on insurance than someone who has a better insurance score.
To avoid additional charges on the premiums for your renters insurance in Rhode Island, it’s important to keep a good credit score. Consistently paying bills on time will help you to maintain a healthy credit score, and it’s important to ensure that the credit records held by consumer credit reporting companies accurately reflect your credit history.
