Did You Know Your Credit History Can Affect Your Insurance Rates!
February 8, 2008
Last week, I got a surprise bill in the mail. Based on my credit score, my auto insurance increased by 40%! Ouch!!! What is going on? I pay all of my bills on time, and I usually pay extra on my credit cards.
Recently, my credit rating plummeted. What did I do wrong? First, I decided to consolidate my credit card bills. Since I believe I am responsible for every penny of the debt, I did not go to some sort of agency to short-change the card companies. Instead I transferred the balance from one card to another. Big mistake!!
Why? I did not know that I needed to contact the credit card company to close the old account. Plus, closing the account is only half the process. I needed to have the credit card company send a letter to the three credit reporting agencies and let them know my account was closed in good standing. Not only do I need to do that for credit cards that are paid in full, I need to consider my old student loans.
The loan company that carried my subsidized and unsubsidized student loans still shows on my credit report as active. Okay, I am so confused!! The account balances were transferred and consolidated to a bank upon my graduation-3 years ago! Why are the accounts still open, as if I am going to ask for more college money? I need to have those accounts closed and ask the company to send a letter to the reporting agencies saying they were closed in good standing in 2005.
I had no idea my credit score could have such an impact on my insurance rates. Now I don’t know if or when my auto insurance will ever go back down. However, I have learned a very valuable, all be it expensive, lesson. Close accounts that you do not plan on using in the future; but, do not assume everything is great. Request creditors send a letter to let the reporting agencies to let them know you are in good standing with the company.
Otherwise, you may watch your insurance raise by a ghastly amount! It seems many insurance agencies are starting to include credit reports in figuring the premium. Check yours out! Do not be like me and learn the hard way.
Has your credit score had any impact on your insurance rates?
All posts by Tina