Top Things to Know About Renters Insurance When You Have Low Credit

Gray apartment with modern design

Renters insurance is still possible with low credit. | in4mal/iStock/Getty Images

Apartment insurance can be extremely valuable. That said, you might wonder if you’re eligible for it if your credit score isn’t exactly ideal.

First, it’s important to know that you absolutely can get renters insurance with bad credit. Will it impact the cost? Possibly, but not definitely.

That’s because different insurance providers take different factors into account when determining your premium. Your credit score is just one of many. Just as a rent calculator takes various factors into account, so do providers when calculating your premium.

Why Providers Look At Credit Score

Providers might consider how safe the neighborhood is, how secure the building is, the number/type of items you want coverage for, and the like. Most renters insurance companies probably will take your credit into an account, but the degree to which they do so will vary from one company to another.

It’s also worth noting that providers typically don’t factor in your credit score because they’re concerned about you paying your bill. Renters insurance is inexpensive. On average, it only costs $12/month, so most customers don’t have trouble making payments.

Providers look at your credit score because there is some correlation between specific credit events and high claims frequency. That means “bad” credit isn’t always bad when applying for renters insurance. Insurance companies simply look for certain events in your credit history that might give them reason to believe you would be more likely to file a claim at some point.

Of course, you may be in a situation where you and your partner are applying for renters insurance together. You might also have very different credit scores. Whose credit will factor in?

That depends. Sometimes, providers will simply average the scores together. Other companies might focus solely on the credit of the first named insured on the policy.

Insurance Can Help Your Credit Score

credit score

Renters insurance can protect the credit you have. | scyther5/iStock/Getty Images

Either way, you shouldn’t worry too much about poor credit having a major impact on the cost of your insurance. Remember, apartment insurance is already much less expensive than people often realize. Renters are also vulnerable to many potential risks, including theft, damage to the building that renders an apartment unusable, personal liability issues, and more.

That’s why experts point out that getting renters insurance actually helps protect your credit in the long run. For example, if expensive personal belongings are suddenly damaged, you’ll find yourself in a precarious financial situation as you go about replacing them. This can negatively affect your ability to stay on top of bills, which will in turn negatively affect your credit.

That’s why you shouldn’t neglect renters insurance simply because you’re worried your credit score will prevent you from getting approved. While it might affect the cost, you’ll still get tremendous value compared to how much you have to pay each month. More importantly, apartment insurance will protect your financial future.

Editor’s note: This article is contributed by Jetty, a modern renters insurance company.