When it comes to insurance costs, your credit record can be just as important as your driving record

It's called insurance scoring, and it can drive up—or drive down—your insurance premiums.

Insurance companies believe there is a correlation between credit history and the likelihood of someone filing a claim. So now, almost 90% of auto insurance companies, and an increasing number of home insurers use credit information to determine your premiums...or if they should even insure you at all.

What is your insurance score? You can order your insurance scores any time by clicking here. Your insurance score takes into account factors such as your outstanding debt...length of credit history...payment history...and amount of revolving credit (the credit card balances you carry over month to month).

You might be thinking: "Hey, this sounds a lot like a credit score." Well, you're right. The two are very similar. However, while both insurance and credit scores look at the same characteristics of your credit report, insurers place more importance on the factors that show long-term stability. They place emphasis on how regularly you pay rather than how much you owe.

Can you improve your score? Keeping your credit healthy can be a big boost to your insurance score (and your credit score, of course!). Here are a few quick tips for a stellar score:

* Limit the number of credit cards you apply for—aim to apply for only the ones you know you'll need

* Pay your bills on time—sounds simple, but it is a huge factor in your score

* Be responsible—keep your balances well under your credit limit

You'll find more ideas on how to improve your credit at the Credit Learning Center.

Stay in the driver's seat One of the best ways to ensure your credit is helping (and not hurting) you is to check it regularly. By checking your credit report frequently, you can stay on top of your information easily.

By making a real effort to improve your credit, you could lower your premiums quite a bit, especially if your credit wasn't up to par in the past. And that could mean a little extra money in your pocket every month.

Just keep in mind that your insurance score is only part of your premium equation. Things like your age, driving record (for auto insurance and home property value (for home insurance) might also be factors. Ask your insurance agent for the complete scoop on your premiums.

About the Author:

TransUnion's TrueCredit.com empowers consumers to manage their credit health, providing information on credit-related issues that range from the significance of a credit report to identity theft protection. TrueCredit.com's offerings include educational materials, free monthly newsletters and online products, including credit reports, credit and insurance scores, credit monitoring, debt management tools and identity theft insurance services.