Credit Score Affects Homeowners Insurance

Having good credit is known to help for auto and home loans but also factors into your premiums for home insurance. Homeowner insurance companies often give better rates and insurance terms to consumers who have good credit scores.

The credit score is used to assess levels of risk the insurance company is taking by insuring you. Studies have shown that people with lower credit scores tend to file more claims. This is why insurance agents will ask for your social security number so they can make sure your credit history is solid.

Dave Syner, of American Insurance Association, says, "The addition of credit scoring gives the homeowners insurance company a clearer idea on how to price a particular risk and in the process gives consumers assurance that they’re not paying more than they should for coverage."

Syner said that statisically people that are more fiscally responsibile with good credit scores tend to file less claims than people with not so good financial history.