On the surface, this seems a very odd way to evaluate how much someone should pay for their homeowners' insurance, but insurance companies have for many years been factoring into their analysis the credit score of an insurance applicant. In other words, if you have a poor credit record and, as a result, a poor credit score, an insurance company is likely to charge you more for your insurance.

Officials at insurance companies explain that extensive studies have shown a very specific correlation between a person's credit score and his or her likelihood of filing insurance claims. No one knows exactly why this is so, but insurance companies have been running with this information for quite some time. Thus, if your insurance premium rises mysteriously, you may want to check to see if your credit score has risen recently.

This is one of many reasons that we should pay relatively constant attention to our credit records−check the credit reports from the three top credit reporting agencies, making certain there are no errors as well as finding ways to keep our records as clean as possible. This is no longer a matter that we can put on the back burner until we decide to take out new home financing. It affects our ability to get any kind of loan, our insurance premiums, and an increasing number of aspects of our financial life.

Thankfully, the credit reporting agencies are now required by law to let us see our credit reports once each year and, for a small fee, to see our credit scores as well. It's worth the effort. After all, a higher credit score might allow us to ask our insurer for a lower premium−and will definitely improve our ability to get loans. For more help with real estate issues call Beth at (425) 450-5208 and visit her website at www.bethbillington.com.

Beth Billington is a Realtor® with Coldwell Banker Bain in Bellevue, WA.