"Real Insurance Letter"
Our Use of Credit History in Determining Your Rate
Your insurance premium or rate is based on many factors including the type of vehicle you drive, the amount and types of coverages you purchase, and the driving and claims history of those on your policy. We also use your credit history to calculate an insurance credit score, which is another factor we use to determine your rate.
Because your credit history can change over time, you have the option to request that we review your credit history and update your rate at your next renewal, but you can only make this request once in a 12-month period. It's important to know that our review of your credit history cannot negatively affect your rate. There are many other factors, such as changes in your driving history or changes in the premium we charge, that may also affect your renewal rate.
It is all waaay more important than what we give it credit for.
People sometimes assume their credit is much worse or better than it really is. Others assume they can improve their credit scores, but ignore their credit reports.
A potential creditor may want to know whether you are likely to repay an installment sale contract or loan or make timely payments on a credit card. It will evaluate your creditworthiness to decide whether to offer you credit or not, and to decide what interest rates and fees to charge.
Most of the information creditors want so they can make these decisions comes from your credit report and your credit scores. In order to understand how the information used in your credit score and report affect your credit, it's important to know how creditors consider is in your report, some things are not, factors include;
*How much debt you can realistically pay given your income.
*Your existing credit and credit limits.
*Your financial stability.
Reference: Attorneys Amy Loftsgordon & Cara O'Neill