Facts about Insurance & Credit
Credit-based insurance scores give insurance companies
another tool to ensure that customers get a fair rate, based on each
policyholder’s unique circumstances. Some companies use a high insurance
score to give policyholders lower preferred rates when other factors
such as type of vehicle or driving record would usually require higher
Using credit wisely is the best financial strategy for maintaining
a healthy credit profile. FICO provides online
tips to help you improve your credit-based insurance
score or contact
us for a free brochure
that includes information about how to manage or improve your
Here are some facts about Insurance Scoring:
As you hear and read more about the use of insurance
scoring, please keep these facts handy to compare with other information
An insurance score is a numerical rating based on factors such
as timely payment of bills, public notices, bankruptcies, tax
liens and credit inquiries. Some insurance scoring models also
include prior claim history.
Insurance scores have proven to be a very accurate way to predict
future claims. Separate studies conducted for insurance regulators
and insurance companies have shown a very strong, statistical
relationship between low credit scores and frequent claims.
Insurance scores are one of many rating factors
used to determine eligibility and rates. Some others are age,
driving record, vehicle, and mileage driven.
Insurance scores do not discriminate against lower income groups.
A low insurance score has nothing to do with income and everything
to do with how people manage their money. In fact, some of
the best insurance scores appear among low and moderate-income
An insurance score does not consider personal characteristics
such as age, gender, income, net worth, home address or ethnicity.
Insurance scores do not include specific information about
The Federal Fair Credit Reporting Act of 1970 (Amended in
2003) and Washington State's 1993 Fair Credit Reporting Act
allow insurance companies to use credit information when evaluating
Your insurance score will not be affected by inquiries from
most insurance companies.
Insurance companies protect your credit information by using
trusted vendors to transmit the data and by maintaining the
highest level of security with personal information.