What Kind Of Credit Information Are Insurance Companies Using? - CREDIT RIGHTS

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CREDIT RIGHTS: What kind of credit information are insurance companies using?


Although some insurance companies still look at your actual credit report, most companies now use a "credit score" or an "insurance score." A score is a snapshot of your credit at one point in time.

Insurance companies and entities that have developed credit scoring models use several factors to determine credit scores. Each factor is assigned a weighted number that, when applied to your specific credit information and added together, equals your three-digit credit score ranging from 0-999, depending on the insurance company and the credit scoring model used. Generally, the higher the number, the more financially responsible the consumer.

Following is a list of the more common credit factors used in determining credit scores:
  • Major negative items - bankruptcy, collections, foreclosures, liens, charge-offs, etc.
  • Past payment history - number and frequency of late payments; days elapsed between due date and late payment date.
  • Length of credit history - amount of time you've been in the credit system.
  • Home ownership - whether you own or rent.
  • Inquiries for credit - number of times you've recently applied for new accounts, including mortgage loans, utility accounts, credit card accounts, etc.
  • Number of credit lines open - number of major credit cards, department store credit cards, etc. that you've actually opened.
  • Type of credit in use - major credit cards, store credit cards, finance company loans, etc.
  • Outstanding debt - how much you owe compared to how much credit is available to you.

    ADDITIONAL CREDIT RIGHTS RELATED FACTS

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    Your Credit ApplicationYour Credit Application
    Put It In WritingPut It In Writing
    You Can Dispute Inaccurate Information With The CRAYou Can Dispute Inaccurate Information With The CRA
    Prohibited InformationProhibited Information
    Denied Credit - What To Do?Denied Credit - What To Do?
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