Insurance Credit ScoringWhy do insurance companies use insurance credit scoring? Insurance companies use many factors to underwrite an insurance policy. In addition to factors like age, marital status, driving record and type of vehicle, most insurance companies use credit information to evaluate a consumer's financial responsibility. Insurance companies have found a strong correlation between financial responsibility and insurance losses. The credit information that the company reviews focuses primarily on bill-paying behavior, not credit-worthiness. Using credit information allows insurance companies to assess risk more accurately. The insurance scoring will not see your actual credit report during the underwriting process. The information will be ordered through an automated system and interpreted by a quoting system in the form of an insurance score. The score will then be used in the underwriting process. When a company uses credit information as an underwriting tool, they are only concerned with the risk grouping into which a consumer falls, which will ultimately influence your insurance premium. Will it affect my credit score? No. The inquiry from insurance scoring will appear on your credit report as an insurance inquiry. Insurance inquiries are only reported to you, so they will not be included in credit score calculations by other parties.
AnnualCreditReport.com is a centralized service for consumers to request free annual credit reports. It was created by the three nationwide consumer credit reporting companies - Equifax, Experian and TransUnion. AnnualCreditReport.com provides consumers with the secure means to request and obtain a free credit report once every 12 months from each of the three nationwide consumer credit reporting companies in accordance with the Fair and Accurate Credit Transactions Act (FACT Act).
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