When it comes to obtaining homeowners insurance, homeowners may wonder what credit score insurance companies use to determine their premiums. Insurance companies typically use Credit-Based Insurance (CBI) scores to assess an individual’s likelihood of filing a claim for homeowners insurance. Here are some reasons why insurance companies make use of CBI scores:
CBI scores have been shown to be an accurate predictor of a person’s risk of filing a claim for homeowners insurance.
Individuals with higher CBI scores are viewed as less risky to insurance companies, and thus may receive lower premiums.
Many insurance companies believe that individuals with better credit scores are more responsible in their financial life and may also behave more responsibly when it comes to maintaining their homes.
It is important for homeowners to understand that their credit score may have an impact on their homeowners insurance premiums. Maintaining a good credit score can not only help with obtaining loans and credit cards but may also help to save money on homeowners insurance.