Your credit score can dictate whether or not you buy a home, but it can also determine the cost of insuring it.

InsuranceQuotes and Quadrant Information Services have been sussing out the effect of credit scores on insurance for three years and found that they have a significant impact on your homeowners and renters insurance premiums. If you have a fair (i.e. median) credit score, you'll pay 36% more for home insurance than someone with excellent credit. That's up from 32% in 2015 and 29% in 2014. Worse, if you have a poor credit score, your premium more than doubles. The 114% increase is up from 100% in 2015 and 91% in 2014.

That penalty applies to other insurance as well. For example, drivers with poor credit often pay double, or even triple, depending on where they live. Using a hypothetical 45-year-old, married female driver with a bachelor's degree and no prior claims or lapses in coverage, insuranceQuotes found that even if you have fair credit, you'll pay an average of 28% more for car insurance than a driver with excellent credit (up from 24% in 2013). And if you have poor credit, your premium doubles, increasing your rate by 104% (up from 91% in 2013) on average.

"What's really concerning is that 42% of Americans aren't aware that there's a relationship between credit and insurance rates," said Laura Adams, senior insurance analyst at insuranceQuotes. "Over 95% of U.S. insurance companies use credit to set auto premiums in every state except California, Hawaii and Massachusetts, where the practice is not allowed."

Thanks to the credit-based insurance score (CBIS), which is completely separate from your credit score, insurers have a tool to determine how likely you are to file a claim. Ranging from 100 to 999, the CBIS is used exclusively by insurance companies and is derived from a variety of factors in your consumer credit report. Actuaries claim that the higher your CBIS the less likely you are to file a claim. Therefore, the higher your CBIS, the lower your car insurance rate. So what determines how likely you are to file a claim? Well, the insurance companies pull data from credit bureaus Equifax, Experian and TransUnion and tend to focus on outstanding debt, length of credit history, late payments, collections, bankruptcies and new applications for credit.

The thinking is that bad credit decisions will lead to bad life decisions that insurers will have to pay for. Lamont Boyd, insurance underwriting expert at FICO, says about 95% of U.S. home insurers use credit-based insurance scores in states where it's allowed. California, Maryland and Massachusetts ban the use of credit in setting home insurance rates.

"Credit-based insurance scores are used by almost every insurance company in the nation because it's a very good segmentation tool," Boyd told InsuranceQuotes. "It's such a powerful tool because it is very, very predictive of future losses. In other words, lower scoring individuals typically have more insurance losses than those in the higher ranges, which means they are more expensive to insure."

Consumers don't necessarily disagree with this, either. According to a survey by CapitalOne, 66% of consumers believe that good credit should afford a person. special treatment. Meanwhile, more than half (55%) think that bad credit devalues someone's social status. A survey by financial site NerdWallet is a bit harsher, noting that 48% of Americans say they wouldn't date someone with bad credit. Along the same lines, 46% of all Americans say that if their partner's credit card were declined on a first date, they wouldn't pursue a second, while 40% of all Americans report a partner's financial situation is more important than their physical attractiveness.

Meanwhile, almost half of non-homeowners tell Bankrate.com that their financial situation stands in their way of purchasing a home. While 29% say they can't afford a down payment, 16% say their credit isn't good enough to qualify for a mortgage. While Millennials are shying away from homeownership altogether, more than 40% of middle aged Americans don't own a home, with 20% claiming bad credit is preventing them from getting a mortgage.

"It's not surprising that a lot of Millennials aren't interested in homeownership yet," said Holden Lewis, Bankrate.com's senior mortgage analyst. "Renting allows them more freedom to move. For people in the prime child-rearing years of 30 to 49, it's more complicated. A lot of them have income and credit issues that might have roots in the recession."

That's emboldened insurance companies to hammer people with less-than-excellent credit who even try to insure their belongings. If your have fair credit, you're going to pay a lot more in Arizona (75% increase), Oregon (67%), Montana (67%), D.C. (65%) and Oklahoma (59%) than you would if you had excellent credit. If your credit for some reason drops from excellent to poor, you're more than tripling your premiums in Oregon (234.9%), Nevada (235.3%), Oklahoma (248%), Arizona (269%) and South Dakota (288%).

It gets just as ugly with auto insurance. If your credit status plummets from excellent to poor, Oklahoma will charge you 201% more for your insurance than it did when you had a decent ratio of available credit to debt and were paying down your balance each month. Nebraska (where rates jump 206% when credit slips from excellent to poor), Nevada (213%), New Jersey (216%) and Arizona (226%) also have no issues tripling your rate. Even "lenient" states like North Carolina (51% hike for poor credit), Virginia (75%), Wyoming (76%), New York (77%) and Connecticut (86%) will punish you with higher auto insurance rates for having sloppy credit -- unlike North Carolina (0.2%), which absolutely does not care what your credit looks like

The ethics of this strategy -- basing home and auto insurance rates off of factors that have nothing to do with maintaining a home or driving a car -- are questionable. Boyd says the average American will never see their credit-based insurance score, while other critics note that there is no standard for

"[T]here is a very dramatic economic downside for people who have credit that's anything less than excellent, and that seems inherently unfair," Amy Bach, executive director of the San Francisco-based nonprofit United Policyholders, a consumer advocacy organization, told InsuranceQuotes. "They keep telling us this data is predictive but they don't know why. And as long as they keep showing that it's predictive they win and consumers lose."

The only way to game the system across the board is to establish good credit. About 40% of your CBIS boils down to paying bills on time. Another 30% is based on how much credit card and loan debt you have vs. how much you're allowed to borrow (your credit-to-debt ratio).

"What helps boost your consumer credit — paying credit obligations on time and not maxing out credit accounts— also helps increase your CBIS and keeps your auto insurance rate down," says Adams.

If you weren't aware that carrying huge balances could hurt your credit -- never mind your insurance rate -- you aren't alone. Bankrate conducted a survey that discovered that 77% of people in the U.S. have no idea that accounts with high outstanding balances hurt their credit score, even if they pay the bills on time. Also, 55% labor under the misconception that they have to carry a credit card balance to increase their credit score, despite myriad attempts to convince them otherwise.

However, the U.S. isn't all that great about monitoring its credit to begin with. A LendingTree survey found that 21.2% of Millennials said they do not know their current credit score, and another 11% said they have never even checked their credit score. Their elders are far worse. Bankrate says that, overall, 70% of Americans don't know that limiting themselves to just one credit account has a negative impact. And more than half of Millennials don't know that having a short credit history can potentially delay major life milestones such as buying a home. Most disconcertingly, 37% of U.S. adults have no idea that if they make a credit card payment more than 30 days late, it will show up as a negative account on their credit report even if the bill is later paid in full.

If you folks were more aware of any of the above, you'd already know how to repair your credit and avoid rate hikes. The FICO score, used by credit bureaus to determine the health of one's credit, values on-time payment and low balances above all else -- yes, much like the CBIS. In fact, the combination of a spotless payment history (35% of a FICO score) and the amount of debt a cardholder carries in relation to their credit limit -- or their credit utilization (30%) -- account for nearly two-thirds of a person's overall credit score. Your mix of credit accounts (10% of your FICO score) also matters. This all affects your ability to lease a car, rent an apartment, obtain a mortgage, open a low interest credit card or do just about anything else that require sterling credit -- including obtaining low car insurance rates.

We've spoken with advisors about this more times than we can count and have developed a multi-point template for credit repair:

1. Fix the errors: Please, just get a free copy of your credit report directly from the credit reporting agencies themselves. Review the status of your account, your credit limits and your personal information and dispute any errors immediately.

2. Beg for forgiveness: If you've been a longtime account holder or a frequent customer and have a late payment on your record, you may be able to talk your creditors into working with you on repayment and, afterward, on removing the offending mark from your record.

"Negotiate paying an old debt if the creditor will mark your account 'paid as agreed,'" says Curt VanderZanden, a loan officer with Mortgage Express in Portland, Ore. "For a late payment on a long-held account, write the creditor, acknowledge your otherwise good history and ask for a goodwill adjustment that will wipe it from your credit report."

3. Pay off the right accounts: If you have cards or accounts with high interest rates, you're going to want to hit those first. Pay them down as much as possible to help dig yourself out from under a pile of interest, and transfer balances to cards with lower rates when possible.

"Timing is everything when it comes to balance transfers," said Matt Schulz, CreditCards.com's senior industry analyst. "It's absolutely critical that you not wait to transfer your balance to your new card, but it's even more important that you pay that whole balance off before the introductory period ends."

A CreditCards.com survey found that who fall behind in credit card payments face an average penalty rate of 28.45%. However, if you're lucky enough to be approved for another card and transfer a remaining balance, the savings can be significant.

Let's say you have $5,000 outstanding on one of your existing credit cards. A 0% balance transfer offer (assuming a 3% balance transfer fee and a 12-month 0% introductory APR) would let you pay that off within a year for $5,150. That's not as great as a straight $5,000, but someone paying a 28.45% penalty rate would have to pay $5,803 over 12 months to pay off that same $5,000 -- or $653 more. Even if you're carrying a standard 15% APR, it would cost $5,415.48 to pay off that balance. That's still $265 more than the 0% offer.

Also, attempt to keep that balance low. Kevin Murphy, senior financial services consultant at McGraw-Hill Employees Federal Credit Union in East Windsor, N.J., notes that a client who never misses a payment, but uses $9,500 of their $10,000 credit limit is still doing considerable harm to their credit. He advises keeping balances should at zero when possible, but says they absolutely must be kept below 30% of a cardholder's total credit limit to avoid trouble. If you have a $10,000 credit limit and still maintain a $5,000 balance, that 50% credit utilization score will come back to haunt you.

4. Increase your credit: This is more of a way to game the credit ratio than anything, but if you're using up $2,500 of your $5,000 available credit, but can somehow open an account with another $5,000 in available credit, you'll trim your credit utilization score from 50% to 25%. The key, however, is not to use any of that newfound credit until you've paid off that old debt.

Cut up your credit cards, tuck them away, but keep them open and, no matter what you do, don't go applying for a whole bunch at once.

"Another fiction is that the more credit cards you have, the better," says Joe O'Boyle, a financial advisor with Voya Financial Advisors in Beverly Hills, Calif. "If you open a bunch of credit cards at once, that can negatively impact your credit score. Get your credit increased later."

Editors' pick: Originally published May 11.