When it comes to managing finances, it's important to consider the potential impact of various factors on your credit score. But what about life insurance? Read on to learn more.

What is a Credit Score?

A credit score is a rating of your financial history, calculated using a variety of factors. It’s used by lenders to evaluate your ability to repay a loan or other type of debt. The higher the score, the more favourable a company will be to accept you.

Factors that can impact a credit score include payment history, length of credit history, types of credit, and new accounts.

Will buying Life Insurance affect my Credit Score?

In short, life insurance does not affect your credit rating. Life insurance is not considered a form of credit or loan and therefore does not show up on an individual’s credit report. While the purchase of life insurance may involve a medical exam or background check, it should not impact a person’s score in any way.

Please note that insurance products offered by Cavendish Online have no cash-in value at any time. If you stop paying your premiums, your cover will stop, your policy will end, and you will receive no benefit.

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Do Life Insurers check your Credit Score?

Some life insurance companies do not require a credit check for applicants, applying for cover. Though depending on the provider, they may require a credit check during the application process.

At Cavendish Online, this is usually done for applications where the total premiums come to £70+. This check is only to verify your identity, and we will not see your actual credit score nor any financial information.

Regardless, it will be considered a soft inquiry, which does not affect your credit score in any way.

Why do Life Insurance Companies run your Credit?

Life insurers will only run a soft search on you for the sake of confirming your identity. 

Do Life Insurance quotes impact your Credit Score?

When it comes to life insurance quotes, they may  involve a soft credit inquiry. A soft inquiry typically occurs when creditors check your credit score without your permission, such as employers and landlords. All in all, quotes do not impact credit scores, so will not affect your credit score in any way, shape or form.

How can I improve my Credit Score?

Is your credit score not as high as you’d like it to be? Here are some tips for improving your score.

  • Pay your bills on time: Late payments can damage your score and may appear as untrustworthy. Set up automatic payments to ensure you never miss a payment.
  • Reduce your credit ratio: Aim to keep your credit card balances below 30% of your credit limit. High credit purchases can negatively impact your score. Consider paying down debt or increasing your credit limits to achieve a lower ratio.
  • Check your credit score regularly: Monitor your credit reports for errors, inaccuracies, or fraudulent activities. Dispute any errors you find to ensure your score is accurate.
  • Limit credit applications: Multiple credit applications within a short period can signal financial stress to lenders. Space out applications and be mindful of the impact they can have on your credit history.
  • Be cautious with credit card balances: Maxing out your credit cards or carrying high balances can harm your credit score. Try to pay off balances in full each month or, at the least, pay back more than the minimum payment.
  • Register to vote: Being on the electoral register is a simple way improve your credit score. 

It's important to note that your credit score won't improve overnight - it takes time to strengthen your credit. Be patient and disciplined with your credit habits, and you should see improvements in due time.

Get advice

Not sure which type of life insurance policy is right for you? Our team of experienced advisers are here to assist you with any inquiries you may have about Life Insurance.

They can provide personalised recommendations based on your circumstances, researching the market on your behalf to help you find the cover you need. Speak to an adviser today to get started.

Speak to the experts...

Give our advisers a call today.

Our team of friendly and professional advisers are on hand to help with any questions you may have regarding Life Insurance.

The advisers can also make recommendations tailored to your current situation and will research the market on your behalf, ensuring you secure the cover you need and supporting you every step of the way. 

01392 43 61 93(Monday to Friday, 9am - 5.30pm)

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