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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