The corporate headquarters for Bollinger Insurance is located across the road from the Mall at Short Hills.  It’s great to have a place where you can take a walk during lunch and stay cool in the summer and warm in the winter.  Then there are those days when you just want to shop. How convenient to just walk across the road and not have to worry about fighting traffic and finding a place to park.  Sometimes it’s a little too easy!

I can’t tell you how many times when I’ve gone to pay for something the sales person asks if I want to apply for a store credit card so I can save 10% on my purchase.  Hello? How in the world will I ever maintain a good credit score if I fall for this and open new accounts randomly and carry more lines of credit than I need? The number of times I apply for a new credit card account – along with other factors discussed below – negatively affects my credit score.

Factors that influence your credit score

• Payment history: The largest factor is credit and loan account payment history. A steady record of on-time payments going back several years shows responsibility.
• Debts owed: The number of accounts you currently have, including type and balance. Try to have just a few active accounts with low balances.
• Length of credit history: The longer your credit history, the better.
• New accounts: Every time you apply for a new account, a record of that application appears on your credit report and drops your score. Limit the number of applications you submit.
• Balance of accounts: It is best to have between two and six open credit cards and one or two loans.
• Negative records: Collections, judgments, and bankruptcy filings will drop your score.

Insurance scores – a snapshot of your credit at a point in time

One of the factors used to determine the premium of a personal auto policy or a homeowners policy has nothing to do with your driving record or claims history—it’s your credit record. According to Conning and Company, more than 90 percent of insurers use an insurance applicant’s credit history—his or her insurance risk score—to slot him or her into a certain program.

When you apply for auto or homeowners insurance, the insurance company typically asks for permission to pull your credit information. The insurer then secures a credit report from one of the credit bureaus. Credit scores range from 300 to 850. If your score is below 650, you may have trouble getting insurance, or you may have to pay a higher premium.

 Monitor your credit reports annually

 The Federal Trade Commission states: “AnnualCreditReport.com is the ONLY authorized source to get your free annual credit report under federal law.  Many companies claim to offer free credit reports – and some do. But others give you a report only if you buy other products or services. Still others say they’re giving you a “free” report and then bill you for services you have to cancel. 

 If you go to www.AnnualCreditReport.com and follow the prompts for your free credit report, you can be sure the reports you get really are free.”

The information found in the sections Factors that influence your credit score and Insurance scores – a snapshot of your credit at a point in time is provided by International Risk Management Institute, Inc.  Copyright 2011