Beating Broke

Personal Finance from the Broke Perspective

10 Insider Tips to Score the Best Insurance Even If You Have Bad Credit

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Finding good insurance with bad credit
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If you have bad credit and are looking for cheap insurance, it’s still possible to get a good rate. According to The Zebra’s customer auto insurance data, drivers with scores between 300 and 579 pay around $126 more per month than those with very good credit scores between 740 and 799. According to Bankrate, the same is true for home insurance. People with bad credit pay 93% more than those with excellent credit. This is due to the fact that insurance companies consider a lower credit score a higher risk factor, meaning that people with a lower score are typically more expensive to insure. Don’t overpay for your insurance. Follow these 10 tips to get the best insurance possible.

1. Shop Around

When you get quotes from insurance companies, they pull a soft credit inquiry. This means that getting multiple quotes won’t affect your credit score. Don’t settle for an expensive plan. Instead, see what’s available in your area.

2. Choose The Right Company

Choosing the right insurance company if you have bad credit
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Choosing the right insurance company is the best way to save money if you have bad credit. You should look for a telematics-based company that tracks your driving habits, mileage, and records to determine your rate. Several companies are better for individuals with bad credit including Geico, Nationwide, and USAA. This may vary based on your location, age, and driving record though. Companies like First Acceptance Auto Insurance or Dairyland are best for drivers who have tickets or accidents.

3. Look for Discounts

If bad credit is driving up the cost of your premium, you can look for discounts in other ways. For auto insurance, many companies offer a safe driver discount. You also can bundle your home and auto insurance for a discount.

4. Be Careful with Claims

Get a quote for repairs before submitting an insurance claim if you have bad credit
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Don’t file a claim for your insurance unless the damages are more than the insurance rate increase you will get in return. Make sure to get a quote for repairs and then do the math. Sometimes you save money by paying out-of-pocket.

5. Exceptions to The Rule

Some states don’t allow insurance companies to do credit checks. If you live in California, Hawaii, Michigan, Nevada, Oregon, Utah, or Massachusetts, your credit score won’t affect your insurance premiums. This may be expanded in the future since lawmakers in many states don’t believe that insurance should be tied to credit scores. Doing so disproportionally harms consumers.

6. Improve Other Risk Factors

home security system improve your risk factor
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For home insurance, you can get additional discounts for installing safety measures like smoke alarms and security systems. For auto insurance, if you have a new driver on your plan or someone with a history of accidents or tickets your policy will be more expensive. Improving your other risk factors will help you get a better rate.

7. Improve Your Credit Score

This may go without saying, but improving your credit score can help you get cheaper insurance. Focus on making on-time payments, utilizing less of your available credit, and avoiding hard credit checks to boost your score. Also, take a look at your credit report for any errors that might be bringing your score down. While a score increase won’t happen overnight, positive actions will help your score increase over time.

8. Reevaluate After a Period of Time

Most insurance companies will offer loyalty discounts after a certain amount of time with no claims. Check in with your insurance company before renewing your policy to see if you qualify. Even if you pay more for insurance within the first year, subsequent years may be cheaper.

9. Check What’s Covered

When you’re shopping for insurance, see what the plans offered actually cover. There are some things you may not need. Of course, if your car or home is financed insurance coverage may be dictated by your lender. If not, you could save money by reducing or eliminating some unnecessary coverage.

10. Choose How You Pay

There are usually small discounts for electronic billing and autopay. Additionally, most companies will offer a discount if you pay for your annual premium upfront. While these savings might be small, they can help you save on insurance costs even with bad credit.

Finding Good Insurance with Bad Credit

You can still find good insurance with bad credit. While you may pay a bit more for your policy, by using these 10 tips you can still get an affordable rate. Don’t settle for the first quote that you get and make sure that you take advantage of all the discounts available to you.

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10 Good Reasons People Are Saying ‘No’ to Buying a House

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Saying no to buying a new house
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Are you struggling to buy a new house? You aren’t alone! There are many smart reasons why Americans are saying “no” to buying a house from growing costs, high interest rates, and market instability. Here we’ll discuss 10 good reasons why not buying a home right now is a good decision for many.

1. Maintenance Responsibilities

Saying no to buying a house because of maintenance costs
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Many people are not buying a house because of the responsibility of maintenance repairs that come with homeownership. Homeowners can expect to pay at least 1%-4% of their home’s value per year on maintenance. This of course doesn’t account for major repairs like the need for a new roof or air conditioning unit. Costs for maintenance also depend on the home’s age, location, materials used, etc. Many new home buyers are saying no to this often costly responsibility and opting to rent instead.

2. No Down Payment

Put frankly, many people don’t have enough saved for a down payment. With the rise in housing prices, down payments are larger than before. With most Americans living paycheck to paycheck, saving this significant amount of money can be a challenge.

3. High Interest Rates

High interest rates are one factor that is making it challenging to buy a home. While interest rates were very low during the COVID-19 Pandemic, there has been a significant increase since then. In April 2022, rates rose to 5%. This was the first time interest rates had been that high since 2011. According to Freddie Mac, by late November of 2024, the average 30-year mortgage rate, which was close to 6% in September, topped out at 6.84%. The Federal Reserve just cut interest rates, but adjustments are being made slowly.

4. Limited Housing Supply

Limited housing supply
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For the last several years, there has been a housing shortage. This in part is due to many Boomers aging in place. To compound the issue, many home sales during Covid resulted in a bidding war or sold for over asking price within days. This was a frustrating experience for homebuyers trying to find their perfect home. Many potential homebuyers are saying no to buying a house because they have lost out on many houses that they made offers on. Even though the market has slowed some, many people are still waiting for a better time to buy a home.

5. Unstable Income

With some individuals experiencing layoffs in their fields of work, they are hesitant to buy a home right now. Layoffs are decreasing though compared to prior periods. However, Reuters also reported that employers are hesitant to hire new workers in December despite an increase in job openings. Finding a new job takes an average of 3-6 months depending on the field. This can be an unsettling environment to make a large purchase like a new house.

6. Frequent Relocation for Work

Some individuals have to relocate for work often. With the market instability, many are saying no to buying a house. There’s too much risk right now to have to buy and sell a home quickly. While staying in the rent trap is costly, it may be more affordable than all the fees associated with buying and selling a home.

7. Too Much Debt

Total debt is at an all-time high as of the third quarter of 2024, according to the Federal Reserve. According to The Motley Fool, in 2024 the average debt per household is $104,215. Mortgage debt makes up 70% of total household debt in the United States. Debt payments per household are up to about 12% of monthly income and delinquency on debt payments is on the rise, now at levels not seen since the 2008 recession. Many homebuyers aren’t ready to take on this mortgage debt as they already have too much debt from loans and credit cards.

8. Inflation

Inflation
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Inflation since 2020 has contributed to many potential homebuyer’s debt and feeling stretched thin with expenses. Americans are spending around $709 more per month on expenses than they were two years ago. That additional cost is close to that of a mortgage payment. As a result, many Americans are saying no to buying a new house.

9. Priced Out of Desired Area

Many homebuyers desire to live in a certain neighborhood close to family or that has a good school system. Unfortunately, many of these neighborhoods have become too expensive. Homebuyers don’t want to settle for long commutes or less amenities in cities and towns that they can afford. As a result, many are waiting for housing prices to come down in desired locations.

10. Medical Debt

Aside from traditional debt, medical debt has become an increasingly difficult problem for Americans. According to The Urban Institute, 13% of Americans, which is more than 43 million people, had medical debt in collections in 2022. Statistics about growing medical debt per household are hard to come by and vary significantly by state. It is clear that healthcare costs are a financial stressor for many Americans, limiting their ability to buy a house.

Should You Buy a New House?

Of course, this is a personal decision, but it’s okay if buying a new house right now isn’t in the cards for you and your family. Until the market stabilizes or you get a better grip on your finances, it might not make sense to commit to a mortgage. Actually, it might be the smart choice. What are your thoughts on buying a new house right now? Let us know your thoughts in the comments.

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7 Alternatives to an Expensive Gym Membership

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Finding alternatives to expensive gym memberships
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January is often a time when we reevaluate our fitness goals and sign up for gym memberships. To be honest, most of us don’t use those memberships for more than a few months. According to health and fitness data, most January New Year’s resolution gym goers drop off by the end of January or early February. The problem is that you will probably be locked into the gym membership, wasting money. According to GoodRx, the average gym membership is between $40-$70 per month. Premium gyms and classes can cost even more. The good news is that you don’t need a gym membership to reach your fitness goals this year. Here we’ll discuss gym membership alternatives that are just as beneficial as a session at the gym.

1. Use Bodyweight Exercises

Bodyweight exercises are not only very safe but are completely free. Research published in the journal Physiology and Behavior found that, as a form of resistance training, body-weight exercise helps build muscle, aerobic capacity, muscle endurance, core and lower body strength, and flexibility. You can also add exercise bands for increased difficulty that is low-impact.

2. Find a Park with Outdoor Equipment

Outdoor gym and alternative to a gym membership
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Many towns and cities have committed to focusing on health. As a result, many community parks have outdoor equipment or fitness zones that are free to use. This equipment, adapted for outdoor environments, is a great alternative to an expensive gym membership. Research has shown that gym equipment in parks not only impacts the health of the community but also helps foster a sense of community and social connection.

3. Take Up Jogging

All that you need to take up jogging is a pair of appropriate shoes. Jogging can help you lose weight, improve your cardiovascular health, reduce stress, and improve your mental health. If you’re new to jogging, make sure to take it slow. Training programs like Couch to 5k or Map My Run will help you ease into running without getting injured.

4. Try a Class Pass

Instead of committing to a monthly membership, there are companies like Class Pass that work with local gyms to provide passes to classes. There usually is a monthly fee for credits or a drop-in fee. But, this could help you only pay for the services you use instead of underutilizing a monthly membership. Essentially, you’ll get your money’s worth this way.

5. Find Virtual Classes

Many classes are available on YouTube for free. You can find every kind of workout from strength training to yoga. If you are a beginner, this is a great way to learn how to exercise correctly and pick up on exercise moves that you can use on your own.

6. Find Classes in Your Community

Community center fitness class
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Many communities offer discounted classes for residents at a very affordable price. Places like community centers, non-profits, and YMCAs are all excellent places to find classes at a lower cost. Check your local Parks and Recreation Department to see what is offered in your area.

Choosing an Alternative to a Gym Membership

Even if you are resolute in your commitment to improving your personal fitness, there’s no reason to overspend on a gym membership. With these alternatives, you can not only save money but add variety to your workout routines. One size doesn’t fit all when it comes to exercise so try out a few gym membership alternatives and see what works best for you.

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