By Peter Wallin, Insurance Agent
www.WallinInsurance.com
How is Credit Score Used for Insurance Purposes?
A credit score is a number that insurance companies use in developing your auto or home premium. It also is used to help them during the underwriting process.
Many insurers will use the score as a rating variable. The better credit score you have, the better rates you could possibly have. Also, many insurers decide whether or not you are eligible for their insurance based upon your rating in combination with your driving history. A general rule of thumb is the higher the score, the better the score. A poor credit score (which could be indicative of previous payment issues) with a poor driving record could determine whether or not an insurer will provide you with insurance coverage.
How can I raise my score?
While you can improve your future score, it is unlikely that any single action you take will have a large impact on your score immediately. That is because your score reflects credit patterns over time. There are things you can do now to improve your score in the future, such as:
• pay your bills on time—delinquent payments and collections can have a major negative impact on your score; and
• apply for new credit sparingly. There is no single action that will raise your score. Each time a credit score is calculated, specific reasons are delivered along with the score. If you have received your score, you can ask for the reasons that came back with your score. These reasons, listed in order of importance, represent why your score was not higher. Addressing these reasons will most likely result in an improvement in your score.
How long is credit information kept?
Payment in full does not remove your payment history. The length of time
information remains on your credit file is:
• credit and collection accounts—seven years from the date of last activity;
• courthouse records (judgments, liens and bankruptcies)—seven years from the date filed; Chapters 7 and 11 remain on file for 10 years from date filed;
• satisfied judgments—five years from date filed; and
• paid collections—five years from the date of last activity with original creditor.
Peter Wallin CLU
Wallin Insurance Agency Inc
1364 College Ave
Elmira, NY 14901
607-734-8799
Serving Elmira, Horseheads, Big Flats, Chemung & Corning.
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