Credit Based Insurance Score
What Does Credit Based Insurance Score Mean?
Credit based insurance scores are calculations that many insurers use to evaluate the risk associated with insuring potential policyholders. These scores are based on the credit history of the potential policyholders. The reason why insurers often use credit based insurance scores is because poor credit is often associated with a higher likelihood of filing insurance claims.
Insuranceopedia Explains Credit Based Insurance Score
Credit based insurance scores are commonly used by auto insurers and by insurance companies that issue homeowner's policies. People with better credit are perceived to be more responsible and less risky. So, a higher credit based insurance score can often help a person get approved for insurance or even get a lower rate. Consumers should be aware that their credit histories can affect their insurance coverage.