Understand How Your Credit Score Affects Homeowners Insurance

"I'm Ronnie Brown on behalf of Expert Village I'm here to discuss tips and tidbits on how to buy homeowners insurance. In this clip, we're going to talk about credit rating. Many of you might ask, "What does credit rating have to do with homeowners insurance?" Well, in the last few years, credit has a lot to do with homeowners insurance. Let me explain. It's important to keep your credit as good as possible because this affects your rates when it comes to homeowners insurance; and actually, in some cases, it can exclude you from homeowners insurance. If you have a decent credit score--and I am not a credit expert--but if you have a decent credit score, we can actually forgive losses with certain companies. A lot of companies are going to a situation where it is zero-tolerance. If you have a loss in the last three years, they will not insure you. But if your credit rating is a score of a certain level or characteristic, then they will waive a loss or even two losses. So it's important to keep you credit at a good, decent standing. Now, this is a trend that is going to cross insurance lines; cross into the auto insurance side, so that credit is very important. Actuaries believe that the lower the credit score, the more likely that person is to have claims. So. thus, they are rating you based upon your buying habits of the past to predict your future claim activity. I believe that every person is judged on its own merit; but when they have data that I can't argue with, I have to go with the flow, as they say. Until, we need to keep our credit decent to insure that we get great ratings on our insurances; not only on the homeowners side, but on the auto side as well."