Comments on: Did You Know Your Credit History Can Affect Your Insurance Rates!

By: Jennifer Nalleweg

Jennifer Nalleweg — Tue, 12 Feb 2008 20:01:29 +0000

You may want to check out Scott Bilker’s blog at http://www.debtsmart.com, as he talks a lot about what you should do with credit cards that you aren’t using and the best ways to keep your credit score high.

Good luck!

By: Tina

Tina — Mon, 11 Feb 2008 05:13:45 +0000

More about my saga with the credit score and insurance rates is coming. Personally, I am shocked and confused by the whole deal.

By: Frugal pursuit

Frugal pursuit — Sat, 09 Feb 2008 19:33:52 +0000

I did know my credit score affected my car insurance rate. The billing statement indicates what my credit score tier is on the front and then when I look at the back of the page for the key, it explains what it means. Since I have a good score, I really did not think much of it.

By: Tim

Tim — Fri, 08 Feb 2008 17:39:45 +0000

how timely this article http://www.bloomberg.com/apps/news?pid=20601109&sid=a8At2fhowyOw&refer=home

By: F2O

F2O — Fri, 08 Feb 2008 17:36:03 +0000

Actually, closing the accounts could be a bad idea. While no one knows for sure exactly how FICO calcs the score, they do offer general information and tips. One of those tips is to monitor your blances to your total available credit. If your balances are over a certian percentage (30 – 50%) your score could go down. So by closing accounts and keeping the same overall balance you will most likely lower your score. Lenth of history is also a big factor, so if you are closing older accounts it could be a double whammy.
In regards to your insurance, this is becoming very common. In fact, I lowered my homeowners insurance by having them underwrite a new policy. I was grandfathered in where the credit score was not used. But since I have an extemely high score (820 as of last week) I reduced my bill by about 25% by cancelling and reapplying with the same company!

By: Becky@FamilyandFinances

Becky@FamilyandFinances — Fri, 08 Feb 2008 14:56:58 +0000

I used to work in the auto insurance industry, so I know that insurance companies have been using credit scores for years. Not all of them do, though, so this might be a good time to get quotes from other companies. I’d say only about half of the companies use a credit score to determine your rates. There should be plenty of other options out there for you

By: Tim

Tim — Fri, 08 Feb 2008 14:01:45 +0000

I also see insurers stepping up their credit worthiness thresholds like banks are doing (can you say Bank of America), too, especially if the insurer is caught up in the subprime through insurance backed investments. It’s definitely worth shopping around now. Also, did you have a change in any insurance claims recently?

By: Tim

Tim — Fri, 08 Feb 2008 13:58:14 +0000

I hope you didn’t close the old card, because that will lower your credit score even more. Your credit score includes age of credit as well as overall credit usage. if you cancel the old car, you are losing the age of that credit history, and your credit history will become younger. second, if you cancel the card, you will increase your overall credit usage. By opening up the second credit card, you have actually decreased credit usage if you were able to transfer the amount from last credit card to new credit card. For example, old card $5k limit, new card $5k limit total limit $10k. amount owed on old card transferred to new card $5k. By keeping your old card open you have 50% usage rather than 100% usage.

something else seems to have happened for the credit score to decrease. I can’t see that opening the new credit card, which will decrease your credit score in the short term (i.e. a year) would equate to a 40% increase in insurance. aside from this, i’d call the insurance company to see about changing the increase for no apparent reason (if the student loans were still active accounts during your last premium payment, that shouldn’t have anything to do with why your premium increased this time around), or else shop for new insurance.

By: No Debt Plan

No Debt Plan — Fri, 08 Feb 2008 13:17:57 +0000

Ouch… a tough lesson to learn. Who are you insured with? I would check my rates with competitors once I got the credit stuff worked out.

Try Geico… they seriously saved me $400+.