Many Colorado drivers and homeowners are surprised to learn that their credit history can affect what they pay for home and auto insurance. In Colorado, insurers may use credit information, but state law sets limits on how they use it.
What Is a Credit-Based Insurance Score?
A credit-based insurance score uses information from your credit report, such as payment history, outstanding debt, length of credit history, and new credit applications, to predict the likelihood of future claims. It is not the same as your lending credit score, and it doesn’t consider your income, race, or where you live.
Colorado’s Rules
Colorado regulates how insurers use credit for personal auto and homeowners insurance. In general, an insurer can’t use credit information as the only reason to deny, cancel, or nonrenew a policy, and if credit information leads to a higher rate or less favorable terms, the insurer must tell you and explain the main reasons. Colorado has also passed laws that require insurers to test their use of outside data and algorithms for unfair discrimination.
How to Protect Your Rate
- Pay bills on time. Payment history has the biggest impact.
- Keep balances low compared with your credit limits.
- Limit new credit applications.
- Check your credit report for free at annualcreditreport.com and dispute errors.
- Ask about re-scoring after your credit improves.
Shop Around
Carriers weigh credit differently, so the same driver or home can get very different prices from one company to the next. We can compare carriers to find one that fits your situation. Start an auto quote or a home quote.
Have questions about your coverage? Call Johnson Insurance Agency at 303-768-8130 or stop by our office at 14 Inverness Dr. E, Suite G236, in Englewood. We compare coverage from multiple carriers for families and businesses across the Denver metro area and Colorado.
Sources
How to Prevent a Holiday Season Home Burglary
Why Do My Auto Insurance Rates Keep Going Up When My Car Keeps Getting Older?
