Many people are surprised to learn that credit can be one of many factors used in insurance pricing. The details vary by carrier and by the rules that apply, but insurers may use a credit-based insurance score as part of their rating process for auto or homeowners insurance.
Does an insurance quote affect your credit?
Insurance companies generally use a soft inquiry for insurance scoring. That is different from a hard inquiry for a mortgage, auto loan, or credit card application. A soft inquiry should not lower your credit score.
Will a better credit score automatically lower your rate?
Not automatically. Insurance companies usually do not monitor your credit every month and then change your rate immediately. A carrier may only review insurance score information at certain times, such as a new quote, renewal review, or when a re-score is requested and allowed by that carrier.
Credit is also only one part of the overall rate. Driving history, claims history, location, coverage limits, deductibles, vehicle type, home characteristics, prior insurance, and carrier-specific underwriting rules can all affect the final premium.
What should you do if your credit has changed?
If your credit has improved significantly, it may be worth reviewing your policies. Faithful Insurance can help compare options for auto insurance and homeowners insurance with multiple carriers to see what may fit your current situation.
To request a review, use the quote request page or contact Faithful Insurance in Peoria, Arizona.