It is not only your credit cards, mortgages, and other loans that are impacted by poor credit scores. A low credit score can also cost you more when it comes to your auto and home insurance.

Insurers use credit scores as one of the key factors to determine what is known in their world as an insurance score. Some studies find that people with lower credit ratings file more claims, which obviously makes them higher-risk. Many theories have been tossed around as to why.

One of the more popular theories is that low-credit-score individuals are more likely to defer important maintenance on their cars, homes, etc. The impact of credit scores on insurance rates can vary depending on the company and state you live in. Some insurers only use insurance scores for screening new customers, while others routinely check the credit of existing policyholders when it’s time to renew. Consumers can improve their chances of qualifying for the best premiums available to them by keeping their score in the mid 600’s or above. Working with a credit restoration agency is one of the best ways to improve your credit.