You probably know that your credit score affects a lot of things, from your ability to qualify for a good mortgage rate to your employability. But did you know it also affects your homeowner’s insurance rates?
If you have a fair credit score, you could pay 32% more for homeowner’s insurance, on average, than someone with excellent credit, according to a recent study by Quadrant Information Services, commissioned by InsuranceQuotes.com.
Got poor credit? You’ll pay twice as much, on average, as that excellent-credit homeowner. When the average annual homeowners insurance premium is $952, according to online consumer research site ValuePenguin.com, that’s not pocket change.
This is the second year in a row that this study was done, and the numbers are higher this year than last year. “We’re not sure if that trend will continue, but I do think it’s a sign that insurers are leaning more heavily on credit as a risk indicator,” says Laura Adams, senior insurance analyst at InsuranceQuotes.com.
That’s because credit continues to be a good indicator of whether or not a consumer will make a homeowners insurance claim. The worse your credit, the statistics show, the greater the chances that you’ll file a claim.
Read more at FORBES