The insurance industry has increasingly been using credit scores to determine policyholders’ rates. Credit scores are determined based on a person’s payment history, amounts owed, length of credit history, new credit, and types of credit. None of these criteria directly relate to a policyholder’s insurance risk. In fact, many consumers who have never filed an insurance claim find their insurance rates rising based solely on their credit score. Study after study has shown that credit scoring has a disproportionately negative impact on people with lower incomes, senior citizens, those who have experienced a medical bankruptcy, and racial minorities.
Have you been negatively impacted by insurance credit scoring? Please share your story with us.
Visit our Insurance Credit Scoring Tips page for helpful tips on how to get your credit score and resources for protecting yourself as a consumer.