It’s pretty common knowledge that people with great credit histories get better rates on home mortgages, auto loans, and other types of financing. Here’s a fact that’s not as well known: your credit history also determines your insurance score – a number that can have a major impact on how much you pay for home and auto insurance.
Insurance Scoring 
In recent years, insurance scores have become one of the things insurance companies consider when calculating home and auto coverage rates. The scores are considered along with age, driving record, claim history, and other factors, to predict how likely a person is to have a loss. Greater likelihood of a loss translates into higher premiums.
Your driving record is one thing – but how does your credit history make you more or less likely to have an accident? Insurance companies maintain that credit behavior can be an accurate indicator of risky behavior in other areas.
While it’s logical (and often correct) to assume that improving your credit score will help improve your insurance score, that’s not always case. Paying your bills on time will typically help because it indicates responsible behavior. But certain credit decisions — like opening several department store charge accounts or running up balances – can hurt your insurance score and increase your premium by hundreds of dollars.
In search of a lower premium
Each insurer has its own method of calculating premiums, so there’s no clear-cut way to find out which company is likely to give you the best deal. In general, though, there are some things you can do to improve your chances of getting a lower premium: 
Shop around. Premiums can vary widely, so get quotes from at least three companies.
Pay your bills on time and check your credit report for errors at least once a year.
Avoid taking out retailer credit cards that are issued by a finance company.
Try to pay balances in full every month, or at least keep balances as low as possible – especially on cards with low credit limits.
If circumstances beyond your control – such as divorce, job loss, or a death in the family – have had a negative impact on your credit, ask the company if they will make an exception.
Donna Parshall writes articles for Check n Go about online commerce, responsible borrowing, investment, and budgeting. Visit their site to learn more about Check n Go installment loans and other services like payday loans and cash advance.
 “Credit Based Insurance Scores.” National Association of Insurance Commissioners and The Center for Insurance Policy and Research.Web. 07 Aug. 2012. http://www.naic.org/cipr_topics/topic_credit_based_ insurance_score.htm
 “The Secret Score Behind Your Auto Insurance.” Consumer Reports.Web. n.d. http://editorial.autos.msn.com/article.aspx?cp-documentid=435604