Tommy has over 15 years experience within the insurance industry, and his primary focus is helping travellers find the right cover for their medical conditions.
Whether you’ve got a house purchase coming up or are just trying to be more conscious of your financial decisions, you might be monitoring your current credit score and trying to improve it. It's important to understand how various actions and decisions can impact your score. As a part of this process, you might know that certain things can affect your credit score and be wondering whether comparing holiday insurance for pre-existing medical conditions with us might be one of those things that affect it.
Credit scores are influenced by several factors, such as payment history, the amount of debt owed, the length of your credit history, and recent credit inquiries. Comparing insurance plans involves a soft credit check, which doesn't affect your score. However, applying for multiple credit cards or loans in a short period can result in hard inquiries, which might temporarily lower your score.
Read on to find out all you need to know about whether applying for travel insurance affects your credit score and learn more about the best practices to maintain or improve your credit rating while making informed financial decisions.
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What is a Credit Score?
Each person has a credit score. It’s a three-digit number, typically ranging between 300 and 850, which indicates to lenders your level of credit risk. In simple terms, it’s a score that shows those who might lend you money how likely you are to pay it back. Each lender will have different scales as to what they deem an acceptable credit score; however, generally speaking, the higher your score, the better your chances of getting approved for loans or credit cards.
Numerous factors can influence your credit score, and understanding them can help you take steps to improve it. For instance, registering on the electoral roll can make you more visible to lenders, and consistently paying your bills on time demonstrates reliability. Additionally, closing unused credit cards can reduce the risk of potential fraud and help maintain a healthy credit utilisation ratio, which is the amount of credit you're using compared to your total available credit.
On the other hand, certain actions can negatively impact your score. Missing bill payments, frequently applying for new credit, and being close to maxing out your credit—such as your overdraft or credit card limit—can all be seen as red flags to lenders.
Interestingly, not borrowing money at all can also harm your credit score. Lenders prefer to see a history of someone who can reliably borrow money and pay it back on time, as it reflects financial responsibility. Without this history, lenders have no data to gauge your creditworthiness, which can make them hesitant to extend credit to you.
Taking proactive steps to manage your credit responsibly can open doors to better financial opportunities, such as lower interest rates on loans and better terms on credit cards. Understanding and monitoring your credit score is an essential part of maintaining your financial health.
Will my Credit Score be Affected by Comparing Travel Insurance Quotes?
No, comparing travel insurance quotes with Medical Travel Compared will not affect your credit score.
In fact, there is no occasion where getting any type of insurance quote would affect your credit score. Typically, a “soft search” is conducted, which does not leave a mark on your credit report. It doesn't matter if you search for just one comparison or a range of different comparisons and quotes; you won’t need to worry about it affecting your credit score.
Soft searches are used to provide accurate quotations without impacting your financial health, ensuring peace of mind while you shop for the best travel insurance options.
What is a Soft Search, and How Does it Work?
A soft search, or soft credit check, is a routine check on your credit file that doesn’t leave a permanent mark. This type of search is often conducted when you are comparing travel insurance quotes to confirm your identity rather than to influence the quote generation process. It’s similar to the level of scrutiny applied when you check your own credit report. Because it doesn’t impact your credit score, it’s a safe way to ensure accuracy and identity verification without any long-term consequences.
On the other hand, a hard search, or hard credit check, can have a more significant impact on your credit score. This type of search is performed when you apply for some form of credit, such as a credit card, mortgage, or even a pay-monthly mobile phone contract. The reason a hard search can lower your credit score is that multiple applications for credit in a short period can signal to lenders that you might be in financial distress or overly reliant on borrowing. Each hard search is recorded on your credit file and can be viewed by future lenders, potentially affecting their willingness to offer you credit.
Understanding the differences between these two types of credit checks is important for managing your financial health. While soft searches are harmless and useful for identity verification, hard searches should be approached with caution and only when necessary, as their cumulative effect can influence your creditworthiness.
Do Insurance Payments Affect Your Credit Score?
There is an occasion when your insurance will affect your credit score, and that’s if you choose a monthly payment plan. If you do choose to opt for monthly payments, this will require a hard search, which will leave a mark on your credit file. This is because a monthly payment plan is a form of lending, and lenders need to assess your creditworthiness before approving such an arrangement.
When you’ve selected the policy for you from your selection of bespoke quotes, you’ll be transferred to the insurance provider of your choice to pay. The majority of providers we work with, here at Medical Travel Compared, only offer one-off payment options, allowing you to pay your premium in a single transaction, via credit or debit card, without impacting your credit score. However, be mindful that a few might also offer the option to pay for your premium with monthly instalments. If you are actively working on building your credit score or trying to avoid any hard searches, you may wish to steer clear of this option.
On the other hand, if you do have a monthly payment plan in place and consistently make payments on time, this can help to improve your credit score over time. Making regular payments is a positive sign to other lenders, demonstrating your reliability and financial responsibility. If you’ve never had a monthly payment plan in place, using a monthly direct debit payment for your insurance premium might be beneficial to your credit score. It shows a responsible borrowing and repayment pattern, which can positively influence your overall credit profile.
In summary, while opting for a monthly payment plan for your insurance premium can initially impact your credit score due to the hard search, it also presents an opportunity to build and enhance your credit score through regular, timely payments. Weighing these factors carefully can help you make an informed decision that aligns with your financial goals and credit-building strategies. Ultimately, it’s essential to understand how credit works and take proactive steps to manage your credit responsibly for a secure financial future.
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In conclusion, comparing travel insurance quotes through Medical Travel Compared will not have any negative impact on your credit score. Soft searches are used to provide accurate quotations without affecting your credit health, ensuring peace of mind while you shop for the best travel insurance options. However, choosing a monthly payment plan may require a hard search and can potentially affect your credit score if not managed responsibly.
By understanding the differences between soft and hard searches and making informed decisions about payment plans, you can actively work towards maintaining a healthy credit score while securing the best insurance policy for your travels. Remember to regularly monitor your credit report and take necessary steps to improve and maintain your financial health, setting yourself up for a worry-free journey ahead.
If you are looking for more information, you can find a wealth of articles in our travel insurance guide section. Alternatively, check out our travel blog.
Get a quoteOnce you have selected a policy from our results list, you will be directed to the chosen insurer's payment platform. Here you can make payment with a credit or debit card. We can also make payment to the insurer on your behalf by taking payment details over the phone. Cheque or cash payments are not accepted.
Single Trip insurance is for one-off, individual trips and will cover your specified travel dates. This is usually up to 45 days; however, some insurance providers can cover up to 94 days. If you’re not a frequent traveller, single trip cover is a great option and will likely be cheaper than an annual multi-trip cover.
If you travel 2 or more times a year, annual trip cover may very well save you money. The maximum duration of any trip will always be specified and will vary by provider. But don't worry, when you get a quote, we'll ask you what your maximum trip length is and only show you quotes that match!
“Pre-existing” refers to any medical condition for which medical advice, diagnosis, care, or treatment was recommended or received before applying for a travel insurance policy. For some conditions, we'll need to know if they have ever been present, whilst, for others, we need to know if they occurred within a certain period
It’s easy to tell us about your medical conditions! After you've provided your trip details and answered some medical history questions, you can add your pre-existing conditions, one by one, for each traveller on your policy. You'll only need to enter your details once; it's all online, and there's no need to call or provide details of your conditions in writing.