Fred Harteis News Articles - By now you know that you need to keep tabs on your credit history to make a good impression on lenders, landlords and employers. But did you know that your home and auto insurers are also looking?
In most states they're allowed to use your credit information to formulate premiums - and in June the Supreme Court decided that your carrier doesn't need to tell you if your credit has caused you to pay more.
In concurrent cases against Geico and Safeco, the Justices unanimously agreed that the companies were not wrong in charging certain poor-credit customers more without notifying them.
The impact of the decision: "You are not going to know if your credit score is costing you," says Harvey Rosenfield, founder of the Foundation for Taxpayer and Consumer Rights.
How insurance premiums are determined is a recipe long kept secret from consumers. Some 90 percent of home and auto carriers use a score based on credit data as part of that recipe, according to risk-assessment firm Fair Isaac, known for its FICO credit score.
Some insurers buy this so-called credit-based insurance score from Fair Isaac or ChoicePoint, another data provider, or devise their own. One insurer may weigh the score heavily, another not so much.
Industry folks say they're simply using all relevant data. "Studies show that how people manage credit is a good predictor of insurance risk," says Claire Wilkinson of the Insurance Information Institute; in other words, insurers think that if you don't pay your bills, you're likely to file a lot of claims.
Whether that's true or not, your carrier will be peeking at your credit history. So you want to make sure it sees you in the best light.
Source: Cnn.com
About Fred Harteis: Fred Harteis leads Harteis International. Fred Harteis has a background in agriculture and has created many successful business ventures.
