Most people know that their credit score will impact receiving a mortgage, but a poor credit score will do more than raise a person's interest rate for a loan. Because home loans often reach into the hundreds of thousands of dollars, with a slightly lower credit score, it can lead to higher rates. However, most people fail to realize they could also have to pay a higher home insurance premium because they do not have a good credit score.
According to a survey from InsuranceQuotes.com, homeowners across the nation will pay as much as 32 percent higher even with fair credit compared to excellent credit. Do you have poor credit? Your insurance could cost twice as much as those who have excellent credit because most states, with the exception of Maryland, California and Massachusetts, will allow insurance providers to set a rate based on credit score. You might have little debt and a clean payment history, but if you have poor credit, the discount you receive will be minimal. What can credit report data include?
You can expect certain expenses to come with owning a home, so you want to do what you can to keep the costs lower. If you did not receive a low rate on home insurance, you could ask your insurance provider to reassess your premium once you have had time to improve upon your credit score.
Credit serves a huge role in a person's financial life because if you do not maintain a good credit report, you will be seen as a riskier customer. If you want to buy a home, that could lead to paying several hundred dollars higher for home insurance. What is the message? Letting your credit score drop will hurt on more levels than just receiving a loan or credit card. People with a solid credit score will have it easier with home insurance than someone with a poor credit score.
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