Your Credit History May Impact Your Insurance Rates

Some insurance companies are using credit scores based on policyholders’ credit histories. Insurance companies argue that the credit score correlates to the likelihood an individual will make a claim. Consumer groups cry foul asking why someone with negative credit entries on their credit reports should have to pay more for insurance. Loretta L. Worters, who is with the Insurance Information Institute states that “Insurers use credit-based insurance scores in a variety of ways. Some companies use it for ratemaking, some for underwriting, others do not use it at all.. FICO, the company that started the credit score business, says that...

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10 Ways to Avoid Lowering Your Credit Score

There are many ways you may inadvertently lower your credit score. One way is renting a car with a debit card. Consumer advocate Lynnette Khalfani-Cox writing for AOL’s WalletPop: says that paying for a car rental with a debit card can actually HURT your credit rating. The reason is that most rental contracts give the rental car company the right to check your credit rating if you use a debit card instead of a credit card. Each time someone checks your credit rating, it's a negative – just like if you are seeking a loan. Here are 9 other innocent...

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Seven Different Credit Scores for Sale Cause Confusion

SmartMoney reports there are now seven different credit scores for sale available on more than 20 websites inevitably leading to confusion among consumers. Experian, Trans Union, and Equifax each sell their own credit scores. The FICO traditional score is the one used by the great majority of lenders. A class action recently filed in a federal court in San Diego alleges that Experian’s subsidiary Consumerinfo.com that operates www.freecreditscore.com is deceiving customers in selling Experina’s PLUS credit score. The lawsuit alleges the score is not one typically used by lenders. Read more: Which Credit Score is Best? – SmartMoney.com http://www.marketwatch.com/story/which-credit-score-is-best-1302212043057#ixzz1JEVwu8Eh

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New Rule Requires Lenders to Disclose Credit Scores

Today, the FTC and Fed Reserve announced that lenders will be required to provide free credit scores to borrowers when the lender uses a credit report to set high interest rates or other loan terms that aren’t the best available. Lenders would also need to provide credit scores when they deny credit, change the terms of an existing credit arrangement or refuse to grant credit in the amount or on the terms requested. Various credit scores are marketed to consumers, but those scores aren’t necessarily the ones banks and other lenders are using to make credit decisions according to experts....

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All About FICO Credit Scores from the FICO CEO

Mark Greene, chief executive of Fair, Isaac & Co., creator and proprietor of the FICO score provided this explanation of credit scores: “The FICO score is a measure of a consumer’s financial health and creditworthiness,” Greene says. It’s simply a number, ranging from 300 to 850 — the higher the better. The average FICO score in the U.S. is about 700, and pretty much every bank in the country uses a FICO score when making lending decisions. But while the scores are important, they’re not the be all and end all. “Scores are meant to be one of several things...

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