There are a lot of questions that people have when it comes to their credit score. A question we’ve been seeing a lot is, “Does getting home insurance quotes affect my credit score?” The answer isn’t completely straightforward.
In this blog post, we will explore how getting home insurance quotes can affect your credit score and what you can do to minimize any damage. We will also talk about rate shopping and some other factors that can influence your credit score and offer some tips for improving it. Stay tuned!
What is a High Credit Score?
Your credit score is a number that represents your creditworthiness. It is used by lenders to determine whether you are a good candidate for a loan and what interest rate they will charge you. There are a few different credit scoring models, but the most common one is the FICO score. This score ranges from 300 to 850, and the higher your score, the better.
How Does Getting Home Insurance Quotes Affect Credit Score?
When you get a home insurance quote, the insurer “forces” your credit report, known as a “hard pull”. This will result in a small, temporary decrease in your credit score. However, if you shop around for quotes and only get one or two, the impact on your score should be minimal.
If you’re worried about how getting home insurance quotes will affect your credit score, there are a few things you can do. First, you can ask the insurer to do a “soft pull” instead. This won’t impact your score at all.
Rate Shopping for Home Insurance
Alternatively, you can get quotes from multiple insurers within a short period of time (14 days or less). This is called rate shopping and it’s treated as a single inquiry by credit scoring models. Rate shopping is a great way to get the best deal on home insurance without damaging your credit score.
When you shop for quotes within a 14-day period, the credit bureaus will treat it as a single inquiry. This means that your score won’t be impacted as much as it would be if you got multiple quotes outside of this window.
What Contributes to a Credit Score?
There are a variety of things that can influence your credit score, including:
- Payment history: This is the most important factor in your credit score. Make sure you always pay your bills on time and try to keep your balances low.
- Outstanding debt: Having a lot of debt can drag down your score. If you’re carrying a lot of debt, try to pay it off as quickly as possible.
- Credit utilization: This is the amount of credit you’re using compared to your credit limit. It’s a good idea to keep your utilization below 30%.
- Length of credit history: A longer credit history will generally result in a better score.
- New credit: Opening a lot of new lines of credit in a short period of time can lower your score.
- Types of credit: A mix of different types of credit (e.g., mortgage, car loan, credit card) is generally seen as positive by lenders.
The best way to improve your credit score is to focus on the factors that you can control. You can’t do much about your length of credit history, but you can make sure you always pay your bills on time and keep your balances low. If you focus on these things, your credit score will gradually improve.
Getting home insurance quotes shouldn’t have a major impact on your credit score. However, if you’re worried about it, you can always ask for a soft pull or shop for quotes within a 14-day period. There are a variety of things that contribute to your credit score, so make sure you keep up with all of them.