Once again I wrote about how important to have a good credit score and a good credit history. Be a person who disciplines on making payments for credit bills regularly made you always getting the best rate on every deal you applied. www.insure.com at the latest article of car insurance shows how your credit history affects your car and home insurance premiums. Yap, both the lenders who use your credit information is your home and auto insurers. Your credit score will correlate to an “insurance risk score” which determine how likely you are to file an insurance claim. Insurance risk scores are similar to credit risk scores that used by lenders to determine whether or not to approve a loan or line of credit.

Craig Watt, a spokesperson for Fair Isaac Corp., told us that “Consumers are becoming more familiar with credit risk scoring, but insurance risk scoring is still fairly arcane.” Both scores appear on your credit information, but the two are not the same thing. “The biggest difference is that insurance risk scores look for stability, but credit risk scores look for a reliable pattern”, said Craig.

Insurance companies use these risk scores to filter through a formula to discriminate between lower and higher insurance risks and thus charge a premium equal to the risk they are assuming. Statistically,people who have a bad insurance score are more likely to file a claim, so your premium bill could rise if you have a bad credit score, even if you haven’t filed a claim. The better credit score will get lower insurance premiums.