Credit Score Affects Insurance Rate?

[Lambeau]

We’re in the process of changing our insurance carrier for both home and auto. One of the Independent Agents we sought a quote from sent me this:

"I kept everything the same and West Bend (insurance company) was $243 higher than last fall. The only difference I can see is the credit score is lower than last fall. All companies factor in a credit score that
affects the rate. All things being equal, the better the score, the better the rate. I circled the second page of the WB quote and it has 782 and 797. Last fall, it was 880 and 848. That
is the main reason I see for the higher rate."

I had no idea that a person’s credit score was factored in the insurance premium. Location, driver’s age, vehicle, miles driven, driver’s record, etc… yup, but not credit score.

So my response to him is going to be, "OK, so my insurance rate will go down as my credit score gets back to 880/848"?

 

[ur bittn]

Try Mercury no one can beat them. and the service is excellent. And they have never mentioned credit scores. I guess it would matter if you pay payments though.

 

[RDJ]

just becaue they don't mention credit scores does not mean that they don't consider them. Every insurance company I have ever dealt with has taken credit scores into account when figuring rates

 

[Screw-Rice]

just becaue they don't mention credit scores does not mean that they don't consider them. Every insurance company I have ever dealt with has taken credit scores into account when figuring rates

Yup and this isn't a new thing. I remember having to pay a higher rate at 16 due to no credit and record.

 

[Lambeau]

Have any of you monitored your credit score on a monthly basis to see how it affects your insurance rates, or even asked your agent about it?

I just sent that agent the same question.

 

[Lambeau]

Here's the response I just received from the Agent:

"Credit scores are factored in one way or another with every insurance company now days. I'm not aware of one that doesn't. It is not monitored on a monthly basis, but is on the initial quote and if purchased, then run every three years or so depending on the company. This is just one factor of many that goes in to the rate. Hope that helps."

 

[svtfocus2cobra]

Try Mercury no one can beat them. and the service is excellent. And they have never mentioned credit scores. I guess it would matter if you pay payments though.

No. Please no. Mercury will not be there to help you when it really matters. When your wrecked car needs a supplement from the shop, you better hope Mercury gives them what they need because they sure as hell haven't anytime I have worked with them.

My brother is also with the State Insurance Commission. He said they have some of the highest complaint rates. Usually the best are Pemco, Allstate, or Liberty Mutual.

Sent from my SM-G935P using the svtperformance.com mobile app

 

[MFE]

It's a huge factor in rate calculation, because there's such a high negative correlation between credit score and risk of claim/payout.

 

[Black02GT]

I thought FICO scores only go to 850?

 

[Lambeau]

The Agent had the credit scores listed as "A-IS" and "H-IS" respectively.
I'll ask...

 

[tones_RS3]

Usually the best are Pemco, Allstate, or Liberty Mutual.

I have Liberty Mutual and I agree with them being one of the best.
You do pay for it. Believe me, I know. LOL

 

[Lambeau]

I thought FICO scores only go to 850?

The Agent had the credit scores listed as "A-IS" and "H-IS" respectively.
I'll ask...

Here's the response the Agent just sent me:
"For West Bend A is for auto and H is for home. They have a separate score for each one. I'm not sure what criteria they use for each. Most companies just have one overall score that applies to both."

 

[Black2010]

Here's the response the Agent just sent me:
"For West Bend A is for auto and H is for home. They have a separate score for each one. I'm not sure what criteria they use for each. Most companies just have one overall score that applies to both."

That doesn't sound like a credit score but more of a risk score. The risk score would be an internal based calculation for the company in question.

Black02Gt is correct that FICO only goes to 850 so it can't be your credit score. Not to mention that 782 and 797 (if FICO) would still be considered A+ scores with just about any reputable business.

 

[Torch10th]

Is and has been the case for decades. I've seen the actuarials and it's staggering. If you have poor credit, your likelihood of filing a claim is substantially higher than somebody with even average credit.

The types of claims involved change as well. People with poor credit tend to have liability and collision claims while those with better credit tend to file claims under comprehensive. Some of that is a side effect of low credit score insured's only retaining liability insurance, but the correlation is still there.

With that said however, credit score is not the only indicator. Age, gender, location, driving history, type of car, annual mileage, vehicle loss statistics, they all go in to the pricing.

Have you ever wondered why almost every insurance company out there says they can save you $500.00 over the competitor? That's the case because certain actuarial scores favor certain types of people. State Farm's star score loves me and as a result I get insurance from them pretty cheaply. My friend who is nearly the identical demographic doesn't do so well and the same types of coverage on similar vehicles is more than double what I pay.

It does pay to shop as a result.

 

[Lambeau]

Thanks for all the input. After all these years of paying insurance, neither my wife or I knew credit score was a factor.

BTW Torch10th - Your '69 is very, very well done, and not overdone. Love it.

 

[KilledbyKenne]

I never knew that to be the case. Guess that's why our rate was so good with Geico when my wife and I got insurance together. Interesting

 

[nxhappy]

only if you get turned in for non payment to the insurance company

you need to try costco for insurance (ameriprise)

they literally saved me 50%

 

[Jefe]

Credit in insurance rating has been used for years, easily 15+. It used to be a major rate decider and now its only one of the factors.

No insurance company should be able to actually see your credit score. There are FCRA privacy laws that forbid it. Legally we aren't even able to use the term "credit score." We call it a "FACET" score, "risk assessment" or "consumer report."

We used to be given a letter score so we could tell the customer where they fall on a scale but now everything is done in the background and all we are able to see is:

- % of Credit Limits Used for all Accounts
- Ratio of Open Credit Card Accounts to Total Open Accounts
- # Inquiries in last 24 Months
- Average Age of All Accounts

We have to notify you that a consumer report will be run and we don't even need a social security # to run the report. Once the report is run it separates customers into 3 tiers: Preferred, Standard or Non-Standard.