Helping You Understand What is Credit Information

Understand Credit InformationYou will be responsible for other’s loss if they are involved in an automobile accident along with you. A lawsuit or a car insurance claim can be filed for the loss that has occurred. To judge about the insured’s premium, consumer credit information will be used by the car insurance companies. Many researches have shown statistical relationship between the loss that has happened to the consumer and the credit score information. Each car insurance company will utilize the credit scores so that they can decide what scoring model they will be using. Following requirements can be included in the model :

Credit Score Rule : Common factors that are used by the insurers are :

  • Foreclosures, liens, collections, Bankruptcy.
  • Payment history : This will give information how many times you have done late payments and also calculate number of days between the due date and the payment date.
  • Length of the credit History : Amount of time consumers have been in credit system.
  • Home Ownership : A consumer rents or owns a property.
  • Inquiries for credit : How many times the consumer has applied for new accounts including utility accounts, credit card accounts and loans.
  • Number of open credit lines : How many department credit cards and major credit cards are open.
  • Types of Credit in Use : Finance company loans, store credit cards and major credit cards.
  • Outstanding Debt : How much credit does a consumer owe.

How To improve Credit Score

You should keep reviewing your credit report because there might be inaccurate information. Plan yourself to improve your credit score. You can improve your credit history if you follow the below suggestions :

  • Pay your bills on time every month.
  • Pay the due amount at least on time.
  • Keep the creditor in contact if you cannot make the payment.
  • When it comes to credit card reduce the amount you are owed to.
  • Reduce the new credit accounts.

Importance of Credit Rating

Importance of Credit RatingThe basic requirement which is needed by every driver is car insurance. This car insurance is required to safeguard you in unforeseen circumstances. All states in US expect that you have atleast basic car insurance that comply to the standards set by the states. Each state will have different requirements for car insurance. Some states expect you to show the documents which determine your financial capacity to handle the accidents. If you own a car, then it is strongly recommended that you should have car insurance but the premium you may have to pay will vary for each person. Premium vary due to many factors.

Before you sign on the dotted line and opt for a car insurance  policy, you need to know the benefit of credit score. This is purely based on your credit history. There are many purposes behind maintaining a good score. While securing loan, finding a house, getting telephone connection, buying insurance, your credit history and hence the credit score comes in to picture. There will be a numerical ranking given by insurance companies based on individual’s credit history and is called “insurance score”. This will be considered during underwriting and finalizing your insurance rates. This all depends on how you will maintain your financial affairs. In fact it also helps you in claiming process making it smooth and quick. A good credit history will definitely fetch you those discounts on your car insurance policy.

All you have to do is just pay your credit bills on time and be in good terms with the banks giving your credit cards. Try paying the bill in full rather than in installments and keep a record of how your credit history is and do the needful to void if any errors.

Myths Versus Truths of Comparing Insurance Quotes

Ward Off The MythsLet’s face it: Comparing insurance quotes isn’t something many of us do every day. So when it’s time to buy car insurance for your new car or because you need to make changes to your coverage and want to see if there’s a better deal out there than your current auto insurance company offers, it’s good to know what’s true and what’s not about comparing insurance quotes. Read on to find out the truth behind the following statements:

All major insurance companies offer more or less the same rates and coverage, so comparing insurance is a waste of time. This is a myth. Though the major insurance companies offer the same types of coverage and terms and conditions, special offers and discounts vary, so it’s always a good idea to shop around before you buy car insurance.

You get the best deals through the insurance company itself. This is a myth. A lot of insurance companies offer low rates online, but often, they offer even lower rates through online comparison sites like AgentInsure.

If I buy insurance online, I can’t ask any questions about my policy.This is a myth, as all insurance quotes contain the phone number of an insurance agent who is trained to answer your questions.

An insurance quote is not binding. This is true. Quotes are an estimate of the rates you’d pay for a policy that meets your requirements and aren’t legally binding.

My credit score affects my car insurance rates. This is true; in all but three states, insurers consider your credit score when determining rates.

Credit Scores Versus Insurance

Impact on Your InsuranceCredit history of any consumer is decided by reviewing his insurance credit score. A model of well tested and developed systems may perform this inquiry and gets the information like history of payment of bills, or if you have a bankruptcy, if the agents have any bill collection, or if you have any exceptional debts, and length of credit history you have.

Understanding Credit Scores

The best and accurate price will be achievable by the insurance companies to your policy with the help of your insurance scores. According to independent research and extensive industry, the low insurance scores will have claims which the insurer needs to pay and these are found out by the credit history patterns. Insurance scores and the underwriting factors are used in the same way.

For instance, high scores are because of the low credit card balance below the limit and payments on time. On the other side, you will have the lower scores if you have a credit history which reaches out the limits of your credit and late submitting of payments, your credit score will have a negative impact. The income of a person, gender, race, religion, geographic location, marital status will not be considered for your insurance score. The only thing it evaluate is credit history. Always make sure that all your bills are paid on time and this will help you to manage your credit history. Maintaining a good credit history and to set up a source of credit will always help you in financial planning. It is very simple in maintaining a clean credit history.

Fix Your Credit History

Never drop your coverage. It is necessary to carry minimum coverage as specified by the state law. You have to pay serious penalties if caught and it will only add to your issues. In case you cannot fix your credit score quickly, you must work to deal with it. To raise your credit score effectively there are some methods which will be really beneficial such as: Paying off a debt or disputing errors on your credit document can provide a speedy fix. You ought to look for an auto insurer that weighs other things over credit when determining your rates. You may also qualify for some discounts that will offset the higher premium. You ought to work to fix your credit. Nice credit makes life a lot simpler in our consumer driven society.