Credit record and claims frequency are linked
The premium is generally established based on the claims risk. A correlation does exist between an individual’s credit score and the likelihood he or she will file a claim. Studies have shown that, if the credit score is low, the probability of an occurrence and thus of filing a claim is higher. The reverse is also true.
Your financial discipline reflects your ability to maintain your property
Your credit record reflects your payment history as well as your financial discipline. Have you always paid your bills on time?
This information is a reliable indicator of your ability to maintain and renovate your property. Both are key factors in preventing material losses and, consequently, claims.
Low income = poor credit score?
Not at all. Never confuse low income with poor credit score. Are you in a low-income bracket? You may have an exemplary credit score even if your income is low. Conversely, a more affluent consumer may have a lower credit score.
To learn more, download the Insurance Bureau of Canada’s brochure All about credit information and insurance.