Priority Insurance LLC Blog
One of the most critical aspects of your life is your credit history. It tells insurance companies how you behave when it comes to payments. Insurers can use your credit history to analyze information about you. It can also predict whether you can follow through payments or not. Your credit-based insurance (CBI) score differs from your FICO score, but it's almost the same thing. Here are some essential facts about how your CBI score can affect your home insurance premiums.
What Exactly is a Credit-Based Insurance Score?
Your credit-based insurance (CBI) score refers to the number that stands for your overall credit standing in terms of any insurance product. In fact, this is one of the many factors that any insurer will look into before it issues you any insurance. Credit-based insurance differs for every insurer, but it depends on several factors that can increase or reduce your premiums.
Factors That Have a Positive Effect on Your CBI Score
A number of factors could positively affect your CBI score. One of them is if you have a long credit history. If you’ve been with a Visa or Mastercard account or any loan account for quite some time, then that’s good for you. Also, if you have bank accounts in good standing and credit accounts with low credit usage, those are a big plus! Most of all, if you have no late payments, then that’s the best part!
Factors That Hurt Your CBI Score
One essential element that creates a negative impact on your CBI score is bank or credit accounts already under collection. This is because if it's under collection, it means you've gone past your payment deadlines several times in the past. If you got so many past-due loans and insurance payments, then it won't do you any good as well. Also, if your insurer can see unusually high use of available credit, then that's really bad. Besides, if you've had numerous applications for credit, especially the rejected ones, then that will impact your CBI score so much.
Why Would Homeowners Insurance Companies Use CBI Scores?
CBI scores are the basis for a correlation between a person’s insurance score and how likely he would behave when paying for his insurance premiums in the future. Also, CBI scores often predict how often a person will most likely file a homeowner's insurance claim. It also follows that those who are on top of their regular premium payments are those who are responsible. They are more likely to take care of their property and not use up their insurance.
Some Final Words
Your CBI score depends on numerous factors, but you should try to be careful with it. However, if you've messed up in the past, then you can't do much about it now. You can only talk to your insurer about other options. However, from now on, you have to be diligent when it comes to all your payments. In fact, that dedication can land you a 30% discount on your home insurance premium!
At Priority Insurance LLC, we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (864) 297-9744 or Click Here to request a free quote.