No matter which credit bureau you approach, consumers are entitled to a free credit report each year. Nonetheless, consumers are sometimes wary about getting a free credit score report. Your free credit report check could be a very handy tool when it comes to managing your credit. Your free credit report not only lets you see what your credit score is but also allows you to track your progress since you’re last credit report. If you are a victim of identity theft your credit report could be a good indicator of that. Hence it is essential that you understand the common misconceptions surrounding your free credit report. [...]
In recent times the 401(k) retirement vessel has come under heavy scrutiny. Most investors, planners and financial analyst are of the opinion that in comparison to company-provided pensions, the do it yourself 401(k) retirement account falls short by a fair bit. With the global economic meltdown, a lot of investors saw their retirement savings being wiped out in one fair sweep. This of-course is not to say that individuals who had company-provided pensions did not suffer a hit. In perspective the reason why the 401(k) account has been subject to questioning is owing to the fact that a lot of older investors lost nearly all of their life’s savings and were forced to live off a much smaller nest egg then they had hoped for or anticipated. Moreover they never had he time as some of the younger investors do to try and salvage their losses. However, the point we are trying to make is that being able to successfully invest and save with 401(k) account is still an extremely viable option. It is necessary to remember though, that just as you cannot blame a tank for blowing up an entire village, it’s the way it is used that determines the outcome, similarly with a 401(k), it is how you make your 401(k) work for you that determines its effectiveness. Here are some ways in which you can make your 401(k) work for you.
Making The 401 (k) Retirement Plan Work
- Increase Your Savings
In today’s economic climate where several households have suffered reduced income and stagnation coupled with unemployment, increase your savings, is easier said that done. None the less, if you want to be able to retire comfortably, it might be a good idea to increase your savings pattern. The last 10 years were supposedly one of the worst as far as returns on stocks were concerned. In comparison to this it is believed that the next 10 years will provide above par returns. However it would be unfair to expect that the market would take care of all your problems. Where the market cannot meet your requirements, you might to meet those yourself by increasing your savings. In addition to this it might also be beneficial to remember that if your 401(k) account has the increase your savings option, take it. This will help you by making it easier to be disciplined.
- Be Prudent With Your Investments
It should be remembered that larger accounts are more susceptible to market movements than smaller account. The reason for this is that larger accounts are usually held by individuals who are nearing retirement or are about to retire. Hence they stand to stand to lose more with a fall or correction in the market. The solution to this is asset-allocation and portfolio rebalancing. Put simply this means that based on your time to retirement and risk tolerance investment in a diversified range of investments, ranging from direct stocks, to managed funds, bond funds, mutual funds, property funds, commodities etc. Moreover it is also essential that you from time to time rebalance your portfolio to make sure that your are not over or under exposed to any one sector thereby being affected adversely by one while losing out on the gains of the other.
Having said all of the above we also feel that one of the mantras to making your 401(k) work for you is to be flexible. Depending upon the way the market is moving make sure that you are moving in the similar direction. If stocks are falling in value and bonds are rising, it may be time to off load a few stocks and get some bonds and do on and so forth. The trick is to stay tuned in and take advantage of opportunities that may arise in the market.
Reference:
- Three Tips to Make Your 401 (k) Work For You – Yahoo! Finance
In today’s credit climate, having a steady job and a good credit rating aren’t enough. When it comes down to mortgages, credit officers are getting more and more picky about the type of clientele they prefer. Hence it is always important that you take a proactive approach and dazzle your mortgage officer with your preparation.
The 4 Cs A Loan Officer Looks For
Primarily when assessing your application, the four Cs are a pre-requisite to a mortgage officer. This tells mortgage officers a lot about they type of client you will shape up to be. The four C’s are:
- Capacity: This refers to the ability of an individual to meet the servicing requirements of a mortgage and how successfully will he/she be able to make the repayments.
- Character / Credit: This of course is proof of the fat that a borrower has not been a bankrupt, been foreclosed on been in arrears in the past or have a history not meeting debts. Most of this information is available on your credit report.
- Capital: This is the down payment or the equity that the borrower holds in the property being offered as collateral. Needless to say, that the higher the down payment or the more the equity in the property the better it looks on your application, not too mention the easier it is makes it you as far as loan repayments are concerned.
- Collateral: This is pretty self explanatory, as it refers to the security being offered, its condition and of course it’s appraisal value. These elements put together constitute the type of security.
One factor that consumers often tend to make a mistake with is that, they feel either a strong income or a great credit score is sufficient to get you over the line. This however is not true. It is a combination of al four factors that make a customer exceptional. Moreover in a credit climate such as the one we have now, lenders are bound to be a bit nit picky.
Paperwork For A Lending Officer
Before applying for your mortgage loan, apart from having perfect credit scores, make sure you have the following paper work in order:
- The last 2 years W-2 forms
- Bank statements for 3 months
- If you are self employed all other relevant financials including the previous 2 tax returns
- The lender may ask for additional documentation, be prepared to give hand them over without any substantial delay
In addition to this remember never to change your circumstances post your loan application, your application could get knocked out the ballpark even if you are an exceptional customer, should you greatly change your situation. Some things to avoid in this regard are:
- Do not apply for new credit once you have applied for your loan, this will affect your serviceability.
- Remember, only float your interest rate once you know that you re comfortable with paying a higher repayment.
- Make sure that you are up to date with all your bills and expenses and your credit score is not hampered in any way.
- If the lender requires additional documentation get it to them as fast as you can, and do not question their request for more paperwork.
- One pivotal mistake consumers often make is that they change their job after having made a mortgage application, it is absolutely essential that you do not do this, as it will reset the clock on your new job and that in turn will greatly affect the mortgage officer’s decision.
Keeping these simple things in mind could be the difference between you getting an approval and you getting shown the door.
Amidst speculation that its capital reserve ratio, which is congressionally-mandated, might be falling below 2%, the Federal Housing Administration (FHA) on 18th September 2009 announced new changes to its credit policy. In addition to this the FHA commissioner, David H Stevens announced that for the first time in its 75 year history, the FHA will appoint a Chief Risk Officer. Both changes are in sync with the fact the agency’s independent actuarial study is being completed and is being sent to Congress in November. The above mentioned changes to a credit policy are believed are going to strengthen the FHA.
The FHA capital reserve ratio is the amount of reserve funds the FHA holds over and above the projected losses over the next 30 years. While that sits currently at 4.4% of its insurance or $30 billion, the FHA is more concerned with long term survival. With changes to credit policies, the FHA also is making sure that they are able to provide affordable loans especially to the first home buyers in this tough economic climate as the US heads out from a recession to recovery phase. Mr. Stevens clearly started that the FHA does not require tax payer assistance nor does it require any action on part of the congress, it is taking these steps to ensure the strength of the fund.
FHA Credit Polich Changes
Some of the changes to credit policies announced by the FHA are:
- Submission Of Audited Financial Statements By Mortgagees: In line with the new credit policy changes, supervised mortgagees will require to submit supervised financial statements to FHA. This is to ensure that these parties are able to meet their potential needs and are adequately capitalised.
- Streamline Refinances: With the introduction of the new changes to the FHA credit policy, the new Loan to Value ratio is going to be capped at 125 percent. In addition to this there will be need top show tangible benefits to the borrower as there will be new standards for income verification, repayment history and the collection of credit score. If the borrower wishes to add closing costs to the transaction there will be an appraisal required as this will also bring the streamline refinances in line with other FHA loan origination guidelines.
- Appraiser Independence: The FHA has taken steps to ensure the its valuation policies are in line with the Home Valuation Code of Conduct (HVCC). It has taken language out of the HVCC o ensure that it completely aligns itself with Government Sponsored Enterprises standards.
- Mortgagee Approval For Participation In Loan Origination: In order to participate in the FHA loan origination program, FHA has introduced the following changes:
1. Mortgagees with approval status must assume liability for all loans approved.
2. While mortgage broker will still be able to still, originate loans through approved mortgagees they will no longer receive independent approval for origination eligibility from FHA.
These changes should align FHA with GSE’s and should potentially increase the number of mortgage brokers.
- Net-Worth Requirements: The FHA plans on increasing the net-worth requirements for approved mortgagees from the $250,000 mark, which hasn’t changed since 1993, to $1 million. This mark may be increased in the future to ensue that FHA is in line with other GSE’s and their net-worth requirements and guidelines. This should help FHA mitigate losses and reduce the future risk on the fund.
These are some of the credit policy changes that can be anticipated from the FHA office come November and once its independent annual actuary is submitted to Congress.
References:
- FHA Announces Credit Policy Changes – U.S. Department of Housing and Development
- FHA Changes Credit Policy – Housing Wire
Recently, the Fed Reserve chairman Ben Bernanke announced that the US recession was most likely over. This “end of recession” announcement saw a surge in the Dow Jones as it closed at a record high of 9791.71 up by 108.30 points. None the less, even with the announcements of the end of recession the unemployment lines do not seem to be getting shorter nor do the number of people collecting long-term unemployment benefits, or are they? At the end of this the questions still remain what is the end of recession and what can you expect.
Even before Ben Bernanke made his announcement, President Barack Obama was hailing the end the recession as early as the month of August. Consumers are of the opinion that things are going to take a turn for the better. While this is true, it is not necessarily going to instantaneous. In its worst recession since the 1930’s, the US economy has a bit of recovery to do before things return to form of normality. Analysts and industry experts believe that the next couple of quarters will see some moderate yet steady growth and as the US economy rebuilds after the devastation of the economic meltdown. We have listed a few things that consumers can expect as we head of a recessionary phase:
The End of Recession – Increase In Prices & Interest Rates
One defining characteristic of a recovery or end of recession is the rise in prices of goods and services. This is nothing but a simple interaction of basic market forces of supply and demand. As the US economy heads out of a recession, and buyer confidence starts to build, there will be in upward surge in demand. With the increase in demand, the prices of commodities is bound to rise. The same is also true for credit. Now that we hope to see the signs of recovery, eventually banks and financial institutions will also raise their interest rates coinciding with rising consumer demand and increased consumer spending capacity.
Predicted End of Recession – GDP & Jobs
Historically the rise in jobs follows a rise in GDP. This has been more so in the face of the fact that the lag between the GDP bottoming out and then job losses has increased over the last 3 recessions. While the GDP of USA sat at a staggering 1.9% in 2008, it’s not all bad news. The Bureau Of Economic Analysis predict that the rate of US unemployment will rise from it’s current low of 9.8% to 9.3% in 2010.
The End of Recession – Increase In Productivity
A major indicator that production will soon be on the rise is the current profit margins of non-financial companies across the country. When the economic meltdown began the profit margins were at 10.5% and now stand at 10%. This is remarkable given the current business environment. While one of the reasons companies have been able to keep up these figures is owing to the fact that there have been close to 6.5 million job losses in this environment. None the less the inventory levels in factories are rising as more and more manufacturers reduce liquidating inventory and the trade deficit narrows. This should eventually lead to increased production levels and there by place upward pressure on demand for labor thereby increasing the demand for workers.
Predicted End of Recession – Increased Consumer Spending
Consumers have been very cautious off late as they have seen the US hit by one of the worst recessions ever. Owing to this the average American household has been saving as much as 4% as last reported. This kind of prudent savings may continue for a while, however will see a slight increase into 2010.
The End of Recession – Credit & Housing
In the wake of the economic crisis we have seen the mother of all credit contractions with it becoming increasingly difficult to obtain credit. Hopefully with the announcement of the end of the recession credit policy and lending criteria might ease up a little however be certain that the days of easy credit is over. With regard to housing prices, the BEA is divided as to when the housing market is going to hit its low. Some feel that it will be by the end of the third quarter of 2009 while some are of the opinion it will be in the fourth quarter and some feel that it will continue on to 2010. None the less economic predictions show that median home prices should rise in 2010.
These are just a few aspects of what the end of recession mean to the everyday investor and some of the things that can be expected to stem from the announcement of Ben Bernanke.
References:
- Economists: End of Recesion 2009 – CNN Money
- Barack Obama hails beginning of the end of US recession – The Telegraph
- The Beginning of the End of the Recession? – Business Week
Your home is one of the most important assets you will ever own. It is extremely vital to insure this valuable commodity. However, all consumers do not always know how to get the best home insurance. It is essential that you get your home insurance right because after all you can’t get your home back everyday.
Getting the best home insurance can be a bit tricky and might involve a bit of research. We have listed out a few tips to help you get started and point you in the right direction.
Home Insurance Policy Tips
Here are some tips to help you get the best home insurance deal:
- Window Shop: The best way to get the best home insurance deal is to shop around. Make sure that you look uo the yellow pages, ask your local insurance agents, friends and colleagues to make sure that you are getting the best insurance quote suited to your needs.
- Raising Your Deductible: The deductible is the amount that is required as a contribution from you prior to the insurance company starting to pay a claim. Consumers if they can should pay a bit more than the minimum require deductible in order to save on their premiums. If you can raise your deductible payments from $500 to $1,000 you could end up saving as much as 25% on your premiums.
- Be Careful Of What Costs To Include: Very often clients make the mistake of including the cost of their land while getting home insurance. This is a big mistake owing to the fact that land does not suffer from risk of theft or fire, and by adding this to the overall costs consumers end up paying a lot more in insurance premiums.
- Take Steps To Reduce Risks On Your Home: An easy way to reduce your home insurance premiums is by reducing the risk exposure of your home to natural and unforeseen elements. By asking your insurance agent you could make your home safer and more resistant to disasters like wind and hailstorms or water and fire damage.
- Keep A Good Credit Score: As more and more insurers switch to taking into consideration a client’s FICO credit score while calculating home insurance premiums it is extremely important to have a healthy credit score prior to applying for home insurance. A good credit score could well be the difference between an average insurance premium and an exorbitant home insurance premium, and all for the exact same property.
- Look For Other Discounts: Quite often insurance companies introduce special offers and rates for their clients. Look out for these discounted offers and rates as they could help you save hundreds of dollars in home insurance premiums.
- Reviewing Your Policy and Value Of Possessions: It is advisable that clients should at least once a year review their review any limitations in their policy. In addition to this you should also revalue your household goods and possessions t make sure that you are not paying the same value for goods which you either no longer have or whose value has fallen. If this is the reduce the floater (this is the variable component of your insurance policy which enable you to insure expensive articles alike jewellery etc whose value is not covered by your home owners insurance) or if necessary get rid of it and save on the extra premium you had been paying.
These are just a few pointers to help clients find their feet when it comes down to finding the right home insurance policy to suit their needs. It is necessary that clients do their research and seek professional advice prior to making a decision on their home insurance, because your home is probably your most important investment and you do not want top get your home insurance wrong.
References:
- Home Insurance – CNN Money
- Home Insurance Tips – International Association of Home Inspectors
Ever so often clients ask the questions as which is the better option, a mortgage refinance or a mortgage loan modification. There is no definitive answer to this question. The only response would be that it is entirely dependent on the individual’s circumstances. While a mortgage loan modification is carried out with your existing home loan provider and involves no or little cost a refinance involves dealing with another lender and comes with additional break costs for breaking your existing mortgage and also extra refinance costs if applicable. Hence it is entirely dependent on what the client is trying to achieve.
Mortgage Modification Plan
Mortgage loan modifications are carried out with your existing bank or mortgage lender. In this case if you have been struggling with your repayments and your mortgage loan account has been delinquent, you may seek the help of your mortgage company and ask them for a mortgage modification plan. There are several ways this can be done. For instance in certain cases the bank might increase your subsequent 12 months payments in order to help you catch up on your missed payments. In other words they will be amortized over a 12 month period. In other cases the bank might add the missed payments to the balance of your loan and allow you to pay it out over the life of the loan. This will increase your payments by a bit. If however you qualify for one of the mortgage loan modification programs which your mortgage provider o bank has you might be able to reduce your interest rates and subsequently mortgage repayments on your home loan.
Mortgage Refinance Loan
With a mortgage refinance loan, things are a little different especially if you are considering a streamline mortgage refinance. In this case you might change your home loan provider or bank for mortgage refinancing. Clients usually do this owing to the fact that another bank or lender is offering a better product or interest rate. With a mortgage refinance you pay out your existing mortgage provider and another bank or mortgage provider places a charge over your property under the newly signed agreement. In the current economic climate owing to the fact that the property market is not doing as well as it was I is possible for your property to be valued less than it was may be a year or two ago. If this is the case then you might not be able to refinance your mortgage owing to the fact that the bank will not have the same value o work with as your previous lender did when you first got the mortgage. In addition to this factor clients also need to consider that there are additional costs which are associated with a mortgage refinance such as refinance charges and break costs.
Obama Loan Modification And Mortgage Refinance Loan Programs
This is a new initiative introduced by the Obama government to help consumers in this tough credit climate with mortgage modifications and mortgage refinances, depending on what their situation demands.
Obama Mortgage Loan Modification
In order for a client to qualify for the Obama mortgage modification program, the loan must be under the under the jurisdiction of Fannie Mae or Freddie Mac. In addition to this the property in consideration should be the primary residence of the applicant and the mortgage should have come into existence prior to 1st January 2009 with an overall balance of less than or equal to 729,750 for a single family. Some of the features of the program are:
- The government shares the costs of the loan modification whereby the costs of the mortgage get lowered from 38% of the gross income to 31%.
- The client receives $1000 for staying current on the loan.
- If the lender has a successful qualifying loan for the loan modification then the lender receives $1,500
Obama Mortgage Refinance Loans
In order to qualify for the Obama government’s mortgage refinance loans the client needs to meet the following criteria:
- The mortgage refinance property should be an owner occupied property.
- Once again it must be a Fannie Mae or Freddie Mac loan.
- The mortgage payments should be up to date and should be able to support the new repayments.
- The existing mortgage loan to value ration should be between the 80% and 105% mark to qualify for this program.
Hence it is very important that the client assesses what they are trying to achieve prior to applying for a modification o refinance. Both mortgage refinances and mortgage modifications can be very advantageous and at the same time help the client achieve diametrically opposite results.
References:
- Home Affordable Modification - Making Home Affordable
- Home Affordable Refinance – Making Home Affordable
- Obama’s Loan Modification Plan – US News
Recently a lot of consumers have been questioning the impact a “Charge Off” can have on their credit report and the duration for which it stays on your credit report. At the very outset, consumers need to understand that charge offs negatively impact your credit report. In addition to this, a charge off debt does not mean that you are free from your debt obligation. Although the creditor may have termed your account as a charge off, clients are still liable to pay.
Charge Off Definition – What Is A Charge Off?
When an account has been in collection for over a period of 180 days or 6 months, the creditor terms this account as a “Charge Off”. In addition to this the creditor will place a charge off listing on your credit report. This is quite similar to the concept of a bad debt in the books of the seller. However unlike as in the case of the bad debt, the creditor will still try and recover the said amount from the debtor where charged off debt is involved. In most cases the creditor sells the account to a collection agency who then pursue the client to collect payment.
How Long Does A Charge Off Stay On Credit Reports?
There are many misconceptions out there regarding charge offs. It is essential to understand that a charge off on your credit report can stay for a maximum of 7 years and no more. However, consumers are somewhat of the opinion that if a collection agency sells the collection account to another collection agency the clock on the 7 year period starts again. This process is known as re-aging and it must be noted that it is illegal. No matter how many times the charge off debt account is bought or sold the time period will remain as 7 years and no more from the date the charge off was listed. Certain collections agencies use a hoax by telling clients that the 7 year period on the charge off will recommence but this is only to make consumers pay and the legally the charge off can only remain for 7 years.
Charge Off On Credit Report – Impact
Charge offs as you already know, negatively impact your credit report. A charge off on your credit report can impact your credit score by up to 100 points. This lowering of your credit score could be the reason that you are denied new credit contracts. Moreover charge off debt will affect your payment history and lenders view it negatively as it means that an account on which you owed a debt has been in collection for over 180 days. This does not reflect well when you are applying for a new credit contract or are even thinking of increasing an existing credit contract.
Remove Charge Offs From Your Credit Report
It must be noted that a charge off can be removed from your credit report only by the original creditor. In order to remove charge offs you might have to negotiate with the creditor who might either accept a partial payment for the charge off or might demand full payment. Remember to get the terms of your agreement in writing. If however the charge off debt account has been sold to a collection agency it will remain on you credit report for 7 years. Try and negotiate with the creditor prior to the creditor bringing a judgment on your account to recover the debt.
It is beneficial for clients to ensure that they stay on top of their contractual payments to avoid situations such as charge offs and debt recovery. If however clients do fall in to these situations it is up to them to ensure that they negotiate their way out the charge off and have it removed from their credit report prior to it being sold to a collection agency as this would result in the charge off being on your credit report for a period of seven years.
References:
- Utility charge off could hurt credit score - Bankrate
If you thought that your credit score only affected your borrowing capacity and future credit contracts, then it might be time to rethink that misconception. In today’s fast changing financial market structure, insurance companies too are keeping an eye on your credit score as highlighted when we discussed auto insurance. Simply put, the home insurance premiums that you pay could be directly related to your credit score or credit report.
Consumer Ratings For Home Owners Insurance
Although it is extremely controversial, but an increasing number of home insurance companies are taking individual credit scores into consideration before deciding on whether or not to issue a home insurance policy contract in the first place. In addition, your home owners insurance premiums are indirectly proportional to your credit score. Stated plainly, the lower your FICO score the higher the homeowner’s insurance premiums and vice versa. In addition to this, factors such as age of the property, prior losses and type of construction are also taken into account.
In order to create and factor in credit score to suit the home insurance ratings, one of the following is used
- Fair, Isaacs & Co, Three digit credit score OR
- A home insurance score is ordered via FICO. OR
- Homeowner’s Insurance companies infuse their own underwriting criteria into the evaluation and take into account the FICO credit or insurance score.
It might be noteworthy that unlike your regular FICO score which is concerned with how much of new credit you can take on, home insurance policy scores on the other hand are concerned with your debt management capacity. Hence it is concerned with the time factor of how long you have been successfully managing your debt.
Home Insure Options : What Can Consumers Do
It should be mentioned that once your home insure application is declined, it does not mean that it is the end of the road. There are home insurance options available to consumers in these circumstances. A few possible alternatives are listed below:
- Obtain Your Credit Report: Get your credit report and check for any credit report errors that might have crept in. If you find these take them up with the appropriate credit bureau and re-approach your home insurance company.
- Ask for Full Disclosure: Speak to your home insurance policy agent and ask them to advise you as to which tier you fall under. This will give you a fair idea of the kind of premium you might have to pay. An agent is required to give you full disclosure if asked these questions.
- Shop Around: Not all homeowner’s insurance companies out there use the credit report scoring system. There are companies which do not pay attention to your credit report when deciding your home insurance premiums. It is about finding the right home insurance policy company to suit your needs.
- Pay Down Short Term Credit: If you find yourself in a situation where you have no option then it might be a good idea to start paying off your credit card debt and small and short term loans to boost your credit score. Once you have done this reapproach your home insurance company and request them to reassess your home insurance application.
Homeowner’s insurance is extremely important in this day and age. Hence it is extremely essential that consumers make the right choice with their home insurance policy. Bear in mind that not all home insurance companies consider credit scores while deciding on premiums or applications. It is all about finding the right insurer to fit your needs.
References:
- Guess Who’s Looking at Your Credit Report – Smart Money, The Wall Street Journal
- How credit scores affect insurance rates – Bankrate
Certain consumers are unaware of the fact but there exists an inverse relation between your auto insurance premiums and your credit score. Simply put, the better your credit report the lower your vehicle auto insurance premiums and the worse your credit report the higher your premiums on automobile insurance. This might come as a surprise to you but nowadays motor vehicle insurance companies are paying more attention to an individual’s credit score than his/her driving record or type of car owned or where the car ranks on the list of most stolen cars. Auto insurance companies have adopted the practice of penalizing individuals with poor credit reports by, in certain cases, charging them up to 3 times as much the personal vehicle insurance premiums as their counterparts with better credit reports would pay.
Relationship Between Auto Car Insurance Premiums And Credit Report
Primarily it needs to be stated that not all auto car insurance companies determine the auto insurance premiums of an individual in conjunction with their credit reports. Big names in the insurance field like GEICO and Allstate in addition o others have adopted this practice. It is not known to the public as to what calculations or formulas are incorporated by automobile insurance companies while calculating the vehicle auto insurance premiums applicable to individuals. While motor vehicle insurance companies are extremely secretive about this, it might be interesting to know the rationale behind linking auto insurance premiums to an individual’s credit report. Vehicle auto insurance companies which have adopted the fore mentioned practice are of the opinion that an individual with a good credit report is under less stress and hence is a lesser threat on the road and a more unlikely candidate to meet with an accident. However individuals with poor credit reports seem to be under pressure and are not only a greater threat to themselves but are also a threat on the road. In addition to this they also pose the threat of not meeting their regular auto insurance premium commitments.
Vehicle Insurance Policy Options
In the event that you find yourself in a situation where the vehicle insurance policy quotes for your automobile are much higher than expected, do not panic, you do have a few options.
- Firstly, speak to your auto insurance agent and inquire as to which Tier you are on. It is mandatory for your agent to disclose this information to you if asked.
- If you find that your credit report is affecting your vehicle auto insurance quotes by and large, try and pay down short term credit like credit cards, personal loans or even vehicle loans to improve your credit score and thereby obtain a lower automobile insurance quote. It might also be a good idea to get your credit report to see if there are any more credit report errors that might have crept in.
- Please note that not all motor vehicle insurers charge you premiums based on your credit score. Shop around to gauge which is the better option. You just have to find the right insurer who does not pay as much attention to your credit report as some of the others.
Considering the fact that auto Insurance is necessary in this day and age, consumers should try and evaluate their options before settling in on an automobile insurance quote. Be careful that your vehicle auto insurance premiums are not inflated owing to your credit report. If this is the case, look for insurers (and there are insurers out there) who do not focus as much on credit reports as their larger counterparts. This might be the difference between you paying an acceptable motor vehicle insurance premium and you being grossly overcharged and penalized for your credit report.
References:
- Can Your Credit Score Affect Your Automobile Insurance Rates? – Credit Report Advice
- What is Insurance Credit Scoring? – Insurance Scored