Believe it or not, your credit score and your insurance premium are related.  Many insurance companies use their client’s credit score to calculate their premium rate.  Although it does not seem fair, and is very sneaky for the insurance companies to do this with out informing their policy holder, it happens.

What can you do about it?  Make sure you know what is on your credit report.  Check it yearly to be sure that it is free of mistakes.

If your credit is already “poor”, work on improving your credit score.  By clearing off old debt, and making sure that you make payments on time for your current debt, you can help to improve your score.

If you find that your insurance company is charging you an extremely high premium, shop around for a new policy.  In this situation, the consumer has the power.  If your insurance company refuses to lower your premium, find another company that will.  Most companies are in need of consumers, and you will likely be able to find a better deal.

So, not only is your credit the deciding factor on things like auto and home loans, it can also cost you more in the most unexpected places.

photo source: mzacha