In Michigan insurance companies are allowed (and nearly each and every one does) to use your credit score as a rating factor in the price of your insurance.
There is a strong statistical correlation between credit score and the likelihood of claims. Meaning, as a generalization, people with lower credit scores are more likely to file insurance claims than people with higher credit scores.
When you think about it, this makes sense.
Individuals with lower credit scores are often stretched thin financially so they aren’t as readily able to afford routine maintenance that may keep potential losses from occurring – whether replacing balding tires on their vehicle or replacing an aging roof on their home.
And since they’re already stretched thin people with lower credit scores are also more likely to turn in small claims that people in a better financial situation would pay out-of-pocket to avoid adversely impacting their insurance rates.
Your agent and insurance company aren’t going to see any specific information detailing what you owe or to whom, but they are going to see a version of your credit score and it significantly impacts how much you pay for insurance. Being responsible with credit will reward you with lower insurance costs!
Did you know?
Our preferred companies rates target clients with excellent credit & claims histories.