The truth behind Insurance Companies and your Credit Score

Many times as insurance agents we get asked the famous question; “Why do you need my social security number to provide me with a quote?”  

The reasoning behind this is that insurance agents and companies who you are seeking insurance quotes from will base those quotes on several factors, including your credit score. When we pull up your credit report to find your credit score, it results in an “inquiry” on your credit.  

Insurance inquiries are shown only on your personal credit report. They are not provided to lenders, so they are not considered in credit score calculations or lending decisions. The inquiries are treated the same way as inquiries for employment purposes, pre-approved credit offers, and requests from you for a personal credit report.

When it comes to credit checks, there are two types of inquiries: “hard pulls” and “soft pulls.” A hard pull refers to credit inquiries for acquiring credit; for instance: credit card company or a lender. A soft pull is an inquiry that will review your credit score, much like an agent would to determine an insurance quote.

When we see a potential client with a high credit score most likely we will consider you a low-risk client, someone who pays their bills on time and in full and is responsible. The insurance companies will then be able to offer you more affordable insurance quotes. Good credit saves you money in many different arenas of your life, including insurance.

You may always request the credit check from the Insurance Company/Agent upon rating.

Information gathered from Experian.

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