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R&R Insurance Blog

How to Raise Your Credit Score By 100 Points in 45 Days

Posted by Steph Schreiber

credit_ScoreInsurance carriers use credit scores as part of their calculations to determine the level of risk you would pose to them as an insured. They have found a direct correlation between credit scores and claim activity. Knowing that, it's important to keep your credit scores in good shape so that your insurance premiums stay in line.

Here are 10 ways to increase your credit score by 100 points - most often this can be done within 45 days.

  1. Check your credit report. Get a free credit report from each of the three credit reporting agencies (Equifax, Experian and TransUnion) once a year at annualcreditreport.com. Look for errors that lower your credit score and take action to correct them. Review the negative factors in the report and work on improving them, such as paying bills on time or reducing debt.
  2. Pay your bills on time. Set up automatic payments using your bank's bill pay service or sign up for e-mail alerts from your credit card company if you sometimes have trouble paying bills before the due date.
  3. Pay off any collections. Paying off a collection will increase your score, but be aware that the record of a debt having gone into collection will stay on your credit report for seven years.
  4. Get caught up on past-due bills. If you missed a payment, get current as soon as you can. A missing payment can lower your score by as much as 100 points. It may take a some time for this black mark to fade from your credit report, but take heart: your credit score usually depends more on your most recent activity than on past credit problems.
  5. Keep balances low on your credit cards. A common rule of thumb is to keep the balance at or below 10 percent on each line of credit to improve your credit score. A balance close to or over the limit will significantly reduce your credit score.
  6. Pay off debt rather than continually transferring it. While a balance transfer to pay zero interest or a lower interest rate on your debt can be worthwhile, make sure you pay down the balance before increasing your debt load. FICO says paying down your overall debt is one of the most effective ways to boost your score.
  7. Don't close paid-off accounts. Closing unused credit card accounts reduces your available credit and can lower your credit score. Keeping them open and unused shows you can manage credit wisely. And think twice before closing older credit card accounts, because a long credit history improves your score.
  8. Shop for new credit over a short time period. If you are shopping for a mortgage, a car loan or a credit card, lenders typically pull your credit report to see if you qualify and to determine the rate they will charge. Too many inquiries over time can negatively impact your score, but if you cluster these applications within a few days or a week, the FICO scoring system will recognize that you are comparing rates for a single new loan or credit card rather than attempting to open multiple new lines of credit.
  9. Have a mix of credit types. FICO prefers to see consumers with both installment loans and credit cards . If you are repaying student loans or have a car loan or a mortgage, then having one or two credit cards is also a good idea. While having too many credit cards can be a negative factor, you should have at least one to prove you can handle credit appropriately.
  10. Apply for new credit sparingly. Only apply for new credit when you actually need it and not simply to boost your available credit. Opening several new credit accounts in a short time frame can lower your score.


Topics: Personal Insurance, credit score, 45 days, 100 points, lower by 100 points

13 Ways to Lower Your Auto Insurance Costs

Posted by the knowledge brokers

Here are 13 ways to make sure you are getting the best value on your auto policy:

1. Drive safely

Accidents, especially accidents where you are at fault, may increase your insurance premium for 3-5 years. If you get into a minor accident, especially one in which yours is the only vehicle involved, you may want to pay out-of-pocket instead of reporting a claim—the amount you pay in accident surcharges can be more than the vehicle repairs if the claim is just a few hundred dollars.

2. Avoid tickets

Speeding tickets and other moving violations can drive your rates up substantially and these, like accidents, usually affect your insurance for 3-5 years.

3. Raise your deductible

Deductibles are what you pay towards a loss before your insurance policy kicks in. By requesting higher deductibles, you can lower your costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15 to 30 percent. Going to a $1,000 deductible can save you 40 percent or more.

4. Before you buy a car, compare insurance costs

Before you buy a new or used car, check into insurance costs. Car insurance premiums are based in part on the car’s value, the cost to repair it, its overall safety record, and the likelihood of theft. Many insurers offer discounts for features that reduce the risk of injuries or theft. Some companies also offer discounts for hybrid vehicles.

5. Reduce coverage on older cars

Consider dropping collision and/or comprehensive coverages on older cars. If your car is worth less than 10 times the premium, purchasing the collision and/or comprehensive coverage may not be cost effective.

6. Idle vehicle? Reduce coverage during winter months

If you have vehicles that you don't use during the winter months or for long periods of time during the year, you can save some money by removing the liability from them while they are idly stored. By carrying comprehensive only during these times, your vehicle is still covered for theft, fire, vandalism, etc. Your liability coverage can be added back on when you decide to use the vehicle again.

7. Package your auto & home policies together

Some companies that sell auto, homeowners and umbrella coverage will take 5 to 15 percent off your premium if you bundle two or more policies from them. Luckily, R&R Insurance represents numerous companies that do just that!

8. Maintain a good credit record

Establishing a solid credit history can cut your insurance costs. There is a statistical correlation between certain aspects of a person’s credit rating and the number of insurance claims the person might be expected to file. Insurers are increasingly using credit information to price auto insurance policies. Check your credit record on a regular basis and have any errors corrected promptly so that your record remains accurate. See improving credit rating.

9. Stay insured

Never let your insurance policy lapse. You may find it difficult to obtain insurance if your policy expires, and your insurance may be more expensive than it was before. Customers who let their insurance expire—even for a couple days—are statistically higher-risk, and insurance companies often charge extra for this.

10. Take advantage of low mileage

If you don't drive very far to work, or if you carpool, make sure this is accurately indicated. Underwriting will take into consideration how much time you spend behind the wheel. Be sure to keep this updated if you change jobs.

11. Hold a longer policy

There may be a price penalty attached to 3- or 6-month policies, so the longer your policy term, the better your rates will likely be.

12. Stay with the same insurer

If you've kept your coverage with a company for several years, you may receive special pricing for being a long-term policyholder. Typically insurers like to see loyalty for at least 3-5 years.

13. Last but not least, ask!

You could get a discount if you take a defensive driving course. If you belong to a professional association, from dental hygienists to fire fighters, you could be eligible for a discount. JUST ASK.

Wisconsin residents, be sure to contact knowledgebroker, Brandy Enger, for the best valued personal lines insurance in Wisconsin! We'll ask the right questions to ensure you are getting every discount available to you.

Topics: Personal Insurance, credit score, save money, package policy, savings, package, idle vehicle, deductibles, auto insurance savings, reduce coverage, lower auto insurance

Your Credit Report Affects Your Insurance Score!

Posted by the knowledge brokers

Your credit report not only has an impact on your financing options for your home and car, it also affects your insurance score, which ultimately affects your homeowners insurance premiums. Insurance companies only consider those items from credit reports that are relevant to insurance loss potential. Both an insurance score and a credit score are derived from the same thing – a credit report, but they are distinctly different. Insurance scores are calculated using the following types of information:

  • Payment history: Have you made late payments or missed a payment?
  • Length of credit history: How long have you been using credit?
  • Current balance on each account compared to your highest balance: For example, if you had high credit card balances before are they lower now?
  • Number of credit accounts: How many accounts do you have? This may include credit card accounts or installment loans.
  • Credit inquiries: How often have lenders made inquiries into your credit report? This does not include “soft inquiries,” such as when a company reviews your credit report to make a promotional offer. (Credit inquiries are not used in all states.)
  • Bankruptcies, foreclosures and other collection activity (Bankruptcy information is not used in all states.)

An insurance score does not take into account income, race, gender, religion, marital status, national origin, geographic location.

Why do insurance companies use insurance scores?
Insurance scores provide an objective tool that insurers use along with other applicant information to better predict the likelihood of a consumer to file a claim. Insurance scores also help to streamline the decision making process, so that policies can be issued more efficiently. By accurately predicting the likelihood of future claims, insurers can control their risk, enabling them to offer insurance coverage at a fair cost.

How do I get a copy of my credit report?
Because information obtained from a credit report is used to determine an individual’s insurance score, customers should periodically obtain a copy of their credit report to confirm its accuracy. Your credit report can be obtained from the three major credit bureaus.

  • Equifax: 800-997-2493
  • Experian: 888-397-3742
  • Trans Union: 800-888-4213

What can I do to improve my insurance score?
Here are a few things you can do to improve your credit report and insurance score:

  • Apply for and open new credit accounts only as needed. Although it is generally good to have established credit accounts, too many credit card accounts may have a negative effect on your score. Over time, responsible use of credit can increase a customer’s insurance score.
  • Keep balances low on unsecured revolving debt like credit cards. High outstanding debt can affect an insurance score.
  • Pay bills on time. Delinquent payments and collections can have a major negative impact on an insurance score.

If you are a Wisconsin resident and would like more information on improving your insurance score, contact knowledgebroker, Dan Wolfgram.

Topics: Insurance, Personal Insurance, credit score, financial history, loss history, loss potential, insurance score, improve insurance score