Pull Credit Reports Renters
2010
Why does your credit history affect car & renters insurance?
I just got a notice from my insurance company that they are pulling credit reports for all policyholders to determine if there should be rate adjustments. Why would this be? Do you think they’re looking at credit scores or at amount of debt?
They are looking at scores ONLY. Statistics show that there is a direct corrolation between low credit scores, number of claims filed, and amount paid out in claims. The lower the score, the higher the claim, and the more frequently a claim is filed.
The numbers I saw at a Choicepoint seminar showed 702 as the “break even” score, where one dollar is paid out for every dollar taken in.
To the best of my knowledge, no one has EVER done any studies about WHY. The insurance companies don’t care – it’s irrelevant. Why do men die sooner? Why do 16 year old boys have more accidents? Doesn’t really matter – all that matters is that the raw data shows a corrolation.
And the insurance commissioners of 49 states agree. Not that the CA insurance commissioner disagrees, but they’ve decided for political reasons to not allow credit scoring as a rating factor.
YYCCC 2010-12-06 Calgary City Council – December 6, 2010
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