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The Insurance Commissioner s Office worked with the Delaware General Assembly to pass a new law in 2007 that makes Delaware one of the fourth strictest states in the country with regards to how credit information can be used in setting insurance rates. The new law took effect on January 1, 2008.

To get the lowest rate possible on your automobile or homeowner insurance policy under the new law, find out if your credit has improved since you first bought your policy or since the last time you renewed it by taking the following steps:

1. Work to Improve Your Credit Score

Credit scores are maintained by three private companies and are based on your financial history. You have the right to get your credit report for free once a year from each of the three companies. Go to www.annualcreditreport.com online or call 1-877-322-8228 to do so.

Tips to improve your credit score include: correcting any errors you find on your credit report by contacting the credit report company; paying all your bills on time; keeping your credit card balances low; not opening new credit card accounts; and paying off debt rather than moving it around.

To learn more about credit scores, download a brochure from the State Banking Commissioner s website.

2. Prepare to Renew with the Same Company

The new law prevents an insurance company from increasing your insurance rates based on your credit score once you are already a customer, but requires most of them to lower your rate if your credit has improved significantly enough.

So, if you have been working to improve your credit or believe your credit score has improved, staying with the same insurance company means there is a possibility that your insurance rates could go down.

If you get a new insurance policy with a new company, that company can use your credit score as one of the factors to calculate the premium you will pay. Even so, it is always possible that a policy with a new company might cost less than renewing with your current company - always shop around. To compare rates between companies for auto and homeowners insurance, try the Rate Comparison website.

3. Ask for a Review of your Credit Score

After January 1, 2008, you are allowed to ask your current insurance agent or insurance company to check your credit score once a year to see if it has improved, and to see if using your credit score would give you lower insurance rates when you renew an auto or home policy.

If you ask to have your credit score checked and it has not improved or even if it has gotten worse your insurance rates cannot go up as a result.

Because your insurance can only go down and not up as a result of a credit check when you renew an insurance policy, you should always ask your insurance company or agent to check your credit when you renew.