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How to Use Your Credit Score to Lower Your Insurance Rates

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As if insurance rates weren’t annoying enough.  Your car gets older and your rates get higher.  And now you realize that because you missed a credit card bill two years ago you may be paying more for your auto insurance.  It’s very frustrating.


Pregnant  woman with money. Family budget.

But, depending on your situation, this information actually may help you LOWER your rates!!



If you are married or if you are listed on an insurance policy with someone else, take a look at how your names appear on the policy.  Make sure the person who has the better credit is listed first.  If you are unsure who has better credit, call your agent and ask them to give you a quote with both names listed first.


If you want to impress your agent, use the term First Named Insured which is insurance jargon for the first name listed on your policy.  If you discover that the Second Named Insured (the person listed second on your policy) has better credit then ask the agent to switch the names and run a report.  There is a good chance your rate will go down.

Unless two people are in the exact same credit tier, there will always be a different rate depending on who is listed first and who is listed second.



Can Your Agent see Your Credit Score?

No.  What we do see is a number, a code of sorts that indicates what tier a person’s credit score is in.  The lower the better.  I have seen numbers as low as 1 and as high as the thirties.  My number is somewhere in the middle, but we’re working on that!!



Success Story

A few years back we were having some serious trouble finding a good rate for one of our insureds.  His renewal rate with his current carrier was unreasonable but we just couldn’t find anything better.  Finally, I simply switched his wife’s name from Second Named Insured and put it First.  We saved them close to a thousand dollars for the year.  Didn’t reduce the coverage or increase the deductible.  Just simply changed the way their names appeared on the policy.

There are countless other stories where we just simply switched how the names appear on the policy and saved people a significant amount of money.



What if you are  Single?

If you are single and your credit score has recently been increasing, you should ask your agent to run a report again and see if your rate has changed.  Companies do not run reports every year so if your credit is stronger now than it was a few years ago you may find that you can lower your rate.  If your score is higher but your rate is not affected then it’s time to shop.



How to Shop for Insurance

If you are with an independent agency just ask them to shop around for you.  They will quote all of the carriers that they represent.  If you are with a company like Nationwide or State Farm than they can recommend a different agent or agency to help you.  If they cant or will not recommend a different agency than you know they have their best interest in mind, not yours.

If that is the case than it really is time to shop.



As always, call me with questions or concerns.


-Keith Laskey-

photo courtesy of SalFalko via Compfight



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