As we’ve discussed on this blog, homeowners’ insurance providers love good credit. Because people who have it file significantly fewer claims than those with poor credit, rewarding financial responsibility makes good business sense for insurance companies. While some methods of building better credit seem separate from your expenses pertinent to owning a home, there are several ways homeowners can build credit while enhancing their lifestyle.
1. Look for bundles. Many providers give discounts for combining homeowners’ and auto policies in an insurance package. The more familiar an agent or more broadly, a company is with your responsibility across multiple insurable assets, the better faith you build as that relationship strengthens over time. Statistics show that homeowners, for instance, file fewer auto claims than people who rent. Bundles give policyholders the opportunity to build credibility across the board.
2. Use credit for major home furnishings. Beware: Many retailers that lease or finance furniture, appliances and other household needs don’t report payments to credit agencies, and credit evaluators may see store loans as a “last resort” financing effort, so do your research. Using a low-interest credit card to pay for big-ticket items is a good credit-building alternative. If you stay on top of your payments, assuming the cost over time can help build your credit score.
3. Limit your utility costs, but pay them on time. On the fence about buying a cable package? You might find room in your budget if you invest in energy efficient appliances, cut back on your use of water and electricity, and shop for an inexpensive subscription. The more utility companies have a positive experience billing you (even if the payments are small), the better your credit score will become.
These steps can make your home and lifestyle more appealing and functional on their own, and can boost your standing with credit agencies at the same time.