You may find this hard to believe if you haven’t experienced it for yourself. It was a shocker to me. Back in the early 2000s, when I still lived in Québec and before I filed for bankruptcy, I had been “treading water” so to speak, just barely keeping up with a mountain of debt, and only paying those creditors who could find me and who continually harassed me. I moved often, used Post Office boxes and private mailbox addresses and had an unlisted phone number, for a while under someone else’s name for an extra measure of stealth. I thought I was pretty slick. Until one time I moved and needed to get tenant insurance.
I shopped around, and considered putting my car insurance together with my tenant insurance since you often get a discounted rate. Having an excellent driving record and never having made any claims under any previous tenant insurance plans, I thought I could pick and choose my insurance. It was around this time when I discovered that a bad credit score, or credit report, can hurt you in more ways than one! One of the places I was getting insurance quotes from advised me that due to my (then) poor credit, it raised my insurance rates! I believe some places will even decline to give you insurance! I was shocked!
But apparently, statistics show that people with poor credit tend to make more claims. I had an excellent track record with insurance and a spotless driving record, but it didn’t matter. Once they saw my bad credit, I was lumped in with the higher risk group. So, you could be an amazing driver with no tickets or accidents, but pay higher premiums, or even be denied coverage from some insurance companies, because of bad credit? Yes. I guess people with bad credit are either worse drivers, or make more (and possibly fraudulent) insurance claims, be it for car or tenant insurance.
In the end, I had to settle for car insurance from Allstate and tenant insurance from Wawanesa. I worked on improving my credit score so that getting insurance wouldn’t be such an ordeal in the future. Since I was making regular payments, and trying hard to improve my credit score, it actually improved a bit. Then I ended up filing for bankruptcy. But I already had my insurance in place. The worst thing to do would be to file for bankruptcy, just as your credit scores plummet, and then have to shop around for insurance. If you can get insurance, you’ll probably end up paying more for it. So, try and keep the same insurance until the dust settles and you’ve started rebuilding your credit.
Just one more good reason to rebuild your credit after bankruptcy – for the sake of insurance! Don’t be like an ostrich and stick your head in the sand. Ignoring a problem won’t make it go away. In today’s credit driven society, you need credit for more reasons that you could imagine – like getting insurance or even getting a job in certain fields. Living on cash for 6 years after your bankruptcy discharge will do you no good. Start rebuilding your credit as soon as possible, so that it can be in good shape for the 6 years after discharge, and will look absolutely immaculate once the bankruptcy drops off your credit report. Don’t wait – start rebuilding and improving your credit today!