The Insurance Information Institute (III) reports an increasing number of insurers are using credit-based insurance scores to decide who gets homeowners coverage and how much they pay. The effect of this, III claims all else being equal, a person with a good insurance score will pay far less for insurance than someone with a poor score.
Compiling a list of insurance companies not requiring insurance credit scoring isn't as easy as you may believe. The reason being is that the industry is in a state of constant change, especially with the current credit crisis this country is facing. For instance, Michigan Appeals Court ruled that state regulators can stop insurers from basing rates on card pay history (late August 2008).
Michigan regulators can stop insurers from using customers' credit scores to determine home and auto insurance rates, a practice critics says arbitrarily jacks up premiums for those with poor credit histories, the Michigan Court of Appeals has decided. The 2-1 ruling reverses a 2005 ruling by a lower court judge who allowed companies to continue using credit scores in setting premiums
The quickest way to determine whether or not a home insurance provider uses credit scoring is to simply call them up from the phone book and ask. Pure and simple. Of course, if you had taken care of your credit file in the past, you wouldn't be concerned whether the insurer checked credit or not.
You can also be proactive by beginning to repair your credit file so you can consider those companies who do check your credit score in determining your premiums. By making this goal a priority you can drastically improve your premiums and financial life in general.
Start by paying all your bills on time. Its one thing to have bad credit from the past, but almost impossible to do any financing or obtain preferred insurance rates with current poor credit. Keep your total credit usage below 35% of the total amount that's available. This is called your debt to income ratio.
Also having a credit file with a history helps. Someone with a credit file with 5yrs of credit (assuming with timely payments) looks better to the credit bureaus than someone with only 1yr of credit showing.
The point is to take the initiative..and not so much reactive.
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Christopher Wright, Financial Cancer Specialist
http://Blog.GoodCreditApproval.com
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