How to Get the Best Financial Stability Discount

Are you looking for car insurance? Lots of insurance companies have taken on a rating system that is based on your credit score. The rating system is called a financial stability discount, or an insurance credit score. It is important to keep your credit score at the highest possible level to qualify for the best financial stability discount. Getting the absolute best credit score is tough and it takes time. Work at it little by little and follow these five rules to help you get the best financial stability discount on insurance.

  1. Pay Your Bills On Time
    A huge factor in your credit score is whether or not you pay your bills on time. One late mortgage or car loan payment can make a huge dent in your score. Set up your payments for automatic withdraw and coordinate with your bank to cover you for any overages or better yet just make sure you have enough money in your account to cover your payments. It is critical for your credit score’s health for you to make your payments on time one hundred percent of the time.
  2. Do Not Open Lots of Credit
    Every time you open a new source of credit it nicks your credit score. Opening one account won’t drastically affect your score, but multiple credit inquiries can. Use new sources of credit sporadically. Department stores lure you in with a discount for opening a new account; however, its best to keep it to your favorite store if you want to keep or improve your credit score.
  3. Do Not Max Out Your Credit
    Maxing out your credit is bad for your credit score. One of the factors calculated into your credit score is how much credit you have versus how much you owe on that credit. For example, it is better to have a credit card with a $10,000 limit with only $2,000 charged against it versus two $1000 credit cards maxed out.
  4. Use Credit Periodically, Don’t Stop Using it Altogether
    If you stop using credit altogether, it’s going to be difficult for the credit bureau to determine your credit worthiness. Lack of credit can negatively affect your credit score. Using a credit card periodically and paying it off on time is the best way to keep your credit score intact.
  5. Pay off Past Due Debts
    It is going to be very difficult to improve your credit score if you have unpaid bills lingering on your credit history. If you truly want to reap the benefits of a good credit score you need to buckle down and get your past due debts paid. Clearing up old debts can increase your credit score immediately.
  6. Don’t co-sign for Unreliable Friends or Family
    If you have been working hard to improve your credit score the last thing you should do is take on someone else’s debt. If a friend or family member is having trouble getting a loan it is because the lender has deemed them a high risk. By putting your name on their loan you are putting your credit score at risk for disaster. Be extremely cautious co-signing for a friend or family member.

Check your credit score at least once a year to see where you are at. Changes are coming so that your actual credit score number will be available to you for free. Even though insurance credit scores are not identical to your true credit score, they do correspond directly with one another. Keeping your true credit score up will most definitely keep your financial stability discount up. Knowing how to get the financial stability discount is the first step to getting the cheapest insurance possible.