How You Can Get Health Insurance Even with Poor Credit

Financial difficulties can sometimes result in bad credit, eventually worsening your financial situation. Aside from difficulties dealing with banks and negotiating with lending institutions for reasonable interest rates, having bad credit can also limit your chances of applying for insurance. Insurance companies check credit scores and reports in order to evaluate consumers’ abilities to repay debts and decide whether or not they are eligible for premium offers. Consumers with good credit score get the best deals when it comes to their insurance, but for those with bad credit scores, the situation is less optimistic.

Credit Score

Why Does Having Bad Credit Result in Higher Insurance Rates?

Because insurance premiums are directly related to consumer credit scores, you can expect to pay a higher insurance rate than usual if your credit is poor. Insurance companies make consumers with poor credit pay more than those with good credit in order to ensure that those consumers are really determined to pay their coverage. In addition, they’re not certain of the bill-paying capabilities of consumers with bad credit (as evidenced by failures to pay bills in the past), so they want to make some extra profit in order to make up for potential losses. Increasing insurance rates for consumers with bad credit helps insurance companies lower their risk of ending up with clients who do not pay (or are incapable of paying) their bills.

How to Get Health Insurance with Bad Credit

If your credit could use some work, the first thing you need to do before getting health insurance is to improve you credit score. Having bad credit results in a higher premium, so if you want to save money, you’ll need to do something to enhance your credit status. It’s best to check your credit several months before you apply for health insurance in order to see what improvements are needed and how you can make them. This includes fixing any mistakes on your credit reports and finding ways to manage your debt. Good credit management should be your goal, and there’s no better way to do this than by checking your credit report.

You have to check every detail on your report and see to it that everything accurate and up to date. Unfortunately, credit reports can contain inaccuracies because the credit reporting companies (which supply the credit reports) only use the information they obtain from the creditors. If a creditor makes a mistake when sending the information, the credit reporting companies won’t know about it. Therefore, it’s your job as a consumer to check your own credit reports for inaccuracies, like an outdated loan that has been paid. Correcting the mistakes on your reports can increase your score, which can help lower your insurance premiums.

Credit scores are determined by several factors, one of the most prominent of which is your repayment history. Having a good repayment history results in a higher credit score, so to improve your score, you need to start making regular payments on your debts and credit card balances. Staying current with your repayment can boost your score in a matter of months, so again, it’s better to start doing this months before you apply for insurance. The bottom line is that you need work to raise your credit score in order to get a more reasonable insurance rate.


Amy Johnson is an active finance blogger who is fond of sharing interesting finance related articles to encourage people to manage and protect their finances.

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