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What they check
When reviewing your credit, most companies look at:
- How many open accounts you have.
- How much you owe compared to your available credit.
- Any past due payments.
- How often you apply for new lines of credit.
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What’s off limits
Insurance companies can’t use against you:
- Medical debts that went to collection.
- Credit checks related to insurance coverage.
- Credit checks from businesses that you didn’t request.
If you have several credit checks in a 30-day period when shopping for a home or auto loan, the insurance company should only count that as one.
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Your rights
Insurance companies can’t charge you more or not insure you if your credit score was hurt by these events:
- A major illness or injury.
- The death of a spouse, child, or parent.
- Temporary job loss.
- A recent divorce.
- Identity theft.
The insurance company has to tell you within 30 days if it’s denying you coverage or charging more because of your credit report. You can ask the company to make an exception if your credit was affected by any of the protected events.
It’s always a good idea to check your credit report regularly to look for changes or errors. Credit reporting companies allow one free credit report each year.
Resources
- Credit Scoring and Insurance
- Federal Trade Commission: How to dispute credit report errors
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