How Your Credit Score Affects Insurance Rates in Tampa, Florida
In today's article you will learn
- What determines a credit score
- What determines insurance rates
- How they are inter-related
In a recent launch of new technology in my office, I decided today to talk about an often overlooked segment of a real estate agent or mortgage person's business
CreditScore Improvement
Now it is no secret that insurance companies tie the cost of rate premiums (and their compensation) to two major things:
- Credit Scores
- Job Type
In fact, MSNBC, in the extreme recent past (ie. the last week) did an article about this very thing. In this article, the Property Casualty Insurers Assoc. of America (lets call them PCIAA for short, shalll we) stated on record that someone who has lost employment (voluntary or not) and their credit score drops (most fo the time it does) is more likely to file an insurance claim! AND THEY CAN PROVE IT!
HUH??? (Imagine the deer in the headlight look)
- What happened to the good ole days of those who drove more had higher insurance rates
- What about those of us how are chronically late for work, therefore, a little more heavy footed
- And my all time favorite (now that I am older) -- What about those of us just learning how to drive
Now I am not going to spend a lot of time on the Cliff Notes of the article. Go read it yourself.
Lets talk about some interesting information about what makes up a credit score
- 30 - 80% Balance to Limit Ratio (maxing out a credit line) 10 - 44 points each
- Have a 30 day late payment 60 - 110 points (each)
- Debt Settlement (this includes short sales) 45 - 120 points
- (With the exception of short sales, you get hit with income taxes)
- Foreclosure 85 - 155 points
- Bankruptcy 125 - 230 points
We all know of debt collection agencies and human medical billing people. These guys will destroy credit with a second thought, all because of an error in coding the medical bill. All of a sudden it gets put on your credit report, and then everyone else (using the Universal Default Clause) slashes your credit lines, Ups the interest rate, cancels your accounts, and thus the down ward spiral begins
And we all know what happens when credit scores go down -- Insurance Rates (and yes, this does usually encompass health insurance) go up, Credit Card Rates go up or are non existant, Deposits on utilities become the norm -- Your life becomes a world where cash is king
In essence, it becomes more expensive to be credit challenged and poor. An endless cycle
In my next installment, I will discuss how this intertwines with the Real Estate Industry and how it will help you
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