Credit Score

Do Homeowners Insurance Quotes Affect Your Credit Score?

Are you wondering if requesting homeowners insurance quotes will hurt your credit score?

The quick answer is NO. It may actually be the other way around.

No one wants to get an insurance plan that will require them to spend a fortune for not enough coverage. So you may have heard the rumor, more like a myth, that if you get an insurance quote, your credit will suffer.

This rumor is responsible for people not shopping around and ending up paying for a policy that is likely not right for them.

The good news is – you can get as many homeowners insurance quotes as you please and your credit score will be safe and sound.

Fact Check: Credit Scores and Homeowners Insurance Quotes

While it is a fact that insurance companies will take a look at your credit score when you ask for a quote, they’re only doing a “soft pull” which is a type of credit inquiry that will not affect your credit score.

These so-called soft pull inquiries will be seen on your personal credit reports, but that’s as far as it goes. These inquiries aren’t available for lenders to see, it’s just for your eyes.

The best thing about it is that it has no effect, whatsoever, on your credit score.

Why Homeowners Insurance Providers Check Credit

Insurers will always want to take a peek at your credit score so that they will have an idea of how much risk they may be taking when providing you with insurance.

This move is backed by studies indicating that people with lower credit scores are more likely to file a lot of claims or have insurance claims that are more expensive.

People with higher credit scores are less likely to file insurance claims which is a good thing for insurance providers.

If your credit score is low, you’ll often be charged higher premiums. That won’t be the case if your credit score is high.
Always aim for higher credit scores for you to enjoy lower insurance premiums and many other benefits that come with it.

Start making sound decisions for your personal finances and you’ll definitely get your credit score back on track.

Just remember that there are also other things, aside from your credit score, that will affect your homeowner’s insurance quotes. Your geography, property value, and claim history can also have an effect on your monthly payments.

Understanding Credit-Based Insurance Scores

It is common among insurance companies to use a credit-based insurance scoring system to successfully predict the risks of your future insurance claims.

Credit-based insurance scores are different from your credit score. It is a three-digit number that reflects the calculations done by using the information found on your credit report.

These are things like the number of outstanding debts you currently have and the amounts owed.

Still, just like with a regular credit report, when a homeowner’s insurance provider requests your credit-based insurance score, there’s no effect on your credit score.

When you’re requesting homeowner’s insurance quotes, you must also carefully consider the coverage you’ll need from the policy you’re researching. Get in touch with a number of insurance providers in your area and remember not to sacrifice your coverage just to get a low priced policy.