OMAHA, NE (FOX42KPTM) – Having a bad credit score can have a major effect on finances including medical insurance, the ability to take out a loan and even some jobs look at credit score.
Michaela Harper with Credit Advisors says it’s a cycle of which it’s tough to get out.
“You have to file that claim in order to get the car running again, in order to keep the job in order to pay the bills,” Harper said.
Another bill that could be affected is a person’s car insurance.
A new study from InsuranceQuotes found that having ‘fair’ or ‘poor’ credit can triple those rates.
The study shows Nebraska has the country’s fourth highest car insurance rates for those who don’t have the best credit.
The study shows that for the average person applying for car insurance, a normal rate of $640 per year can skyrocket to almost $2,000.
A 200 percent jump if a person’s credit goes from ‘excellent’ to ‘poor’.
Harper says she thinks it’s because of Nebraska’s low unemployment rate.
“There’s a little less tolerance for falling off the grid in Nebraska then there would be in other parts of the country which fluctuate rapidly,” she added.
Insurance companies like Geico and State Farm say there’s a pattern with credit score and how often people file claims.
“Risky behavior tends to ferment risky behavior in other parts of your life,” Harper said.
Experts weigh in on important decisions that can help raise a person’s credit score including:
- Checking the credit file once a year through places like Credit Karma
- Not changing insurance providers until credit scores are higher to prevent an increase with a new company
- Paying bills at least 10 days in advance to allow for the bank to process the payment
