- 1). Evaluate your financial position, and set up a budget for paying off any past due debt. Contact creditors to make payment arrangements or to negotiate lower payoff amounts. As your personal debt management improves, so does your credit score--and consequently your insurance score.
- 2). Stay current with your bills. For debts that are not past due, make sure you pay them on time even if you make only the minimum payment required. Consider setting up automatic bill payments to avoid being late on payments. This helps build a good credit history, which is advantageous when you are shopping for insurance.
- 3). Reduce your credit card balances. Use your credit cards, but do so wisely and make required payments. Not making payments or having too much credit card debt will raise your credit and insurance score, and also could raise the interest rate you pay on your cards. However, don't cut up your cards altogether. According to InsuranceScore.com, insurers consider people without any credit cards to be a higher risk than people who manage credit card debt effectively.
- 4). Avoid opening new lines of credit or getting new loans. Don't make new purchases unless you can afford them without taking on new debt.
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