You know that having a good credit score can bring a lot of financial freedom into your life and make everything from buying a home to leasing a car and getting a department store spending line a whole lot easier. However, you probably don’t know that having a low credit score could mean paying a lot more for homeowner’s insurance if you already own your home.
The truth is that a dismal credit score could force you to pay twice as much as somebody with an excellent credit score for your homeowner’s insurance. It may not seem fair, but that’s the way the system works in many cases to protect the insurance company.
Why Is Homeowner’s Insurance More Expensive?
The fact that homeowner’s insurance is linked to consumer credit scores by many companies is somewhat controversial these days, but that doesn’t seem to stop companies from doing it. That’s because these companies say that individuals with lower credit scores tend to file more claims, costing them more money to institute a policy.
Whether it’s fair or not, you don’t want to pay more than you need to each month.
Avoiding a Low Credit Score
One of the worst things you can do for your credit score is spending money that you don’t have. While that sounds easy to avoid, there are times when you aren’t going to be able to pay for everything you need in cash.
Using your credit cards can be tempting, but another option to consider is getting a cash advance online. When you get an instant cash advance online you’ll have flexible payment terms to give the lender the money back. These terms are often longer than credit card companies will give you before they start dinging your credit score in a way that can be hard to fix for more than a year.
There’s nothing wrong with credit cards, but use them the right way, and consider getting an online cash advance instead. You don’t want to damage your credit. It really can cost you – even when it comes to things like homeowner’s insurance bills.