Three steps to improving your insurance score: Part 3

In the previous posts, we discussed getting your free credit file disclosures at a site like and checking them for errors.

Step 3:  Take steps to improve your insurance score

Your insurance score reflects your history of managing credit, with more emphasis on recent information.  Because certain key items drop off in as little as two years, you can often make a noticeable improvement in your insurance score.

What you can do:

Pay accounts on time. Any account with even a single late payment counts against you, while each account paid as agreed counts in your favor.
Apply for new credit only when needed. Both the number of credit accounts you have and the number of credit inquiries are key factors in determining your credit score.  (Insurance company inquiries and inquiries by mass marketers do not count against you).
Only utilize the credit you really need. Insurance companies look at the total balance you owe as a percent of your total credit limit (does not include mortgages).  They also consider the number of accounts that are close to being “maxed out,” with a balance of more than 75% of the credit limit.
Keep your oldest accounts active. While it is tempting to close all inactive accounts, you should keep your older accounts open.  Some formulas use the oldest account age, while others use the average length of time all accounts have been open as factors in your score.
Close revolving retail accounts, such as store credit cards, unless you use them frequently or have had them for a long time.  These accounts count against you even when there is no outstanding balance.  Installment accounts such as appliance financing or boat loans are considered closed when paid in full.

For more information, drop by our website at, or get in touch with me.

The information in this post is general in nature, and geared toward insurance conditions in Western New York.  As always, you should speak with an insurance adviser to determine your specific insurance needs.

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