Credit History Basics: How is My Insurance Score Determined?
Your insurance score is calculated mathematically by external credit bureaus. These agencies use specific information about your credit history and credit management to determine your score. Much like credit scores, we can’t know exactly how scoring agencies reach the number that they give to your insurer. However, there are a few things we know for sure.
While scoring agencies are secretive about their formulas, you should know that your Georgia homeowner’s insurance company does not have access to the specific credit information contained in your credit score, or your personal information. That means they don’t base your rate on your race, religion, gender, or marital status – just your insurance score.
How do Georgia homeowner’s insurance companies use my score?
Research has shown that insurance scores are an incredibly accurate predictor of how likely an individual is to file a claim. This is why nearly all insurers use these scores in combination with other factors when writing policies. Essentially, insurers use your insurance score as a way to anticipate the likelihood of a loss.
Take Control of Your Credit Score to Improve Your Insurance Score
Although we don’t know exactly how scoring agencies calculate your score, we know that many of the same factors that impact your credit score impact your insurance score. You can improve your credit score over time by keeping some good habits, like:
- paying your bills on time;
- keeping your credit card and other revolving balances as low as possible;
- only opening new credit accounts when necessary; and
- checking your credit report regularly to resolve any issues in a timely manner.
You have the legal right to view your credit report and have the reporting company correct or remove any inaccurate information. You can request a free copy of your credit report from one of the following three agencies:
3. Trans Union
We typically review policyholder insurance scores on an annual basis. If your score could be better, make some changes to your credit management habits and work on improving it. Over time, you may improve it enough to earn better Georgia homeowner’s insurance estimates.