Your Credit Score & Insurance Rates You PayInsurance companies are increasingly using credit scores to determine rates and whether they even want to do business with you. These companies believe your credit determines how likely you are to file an auto or homeowners insurance claim. This trend is increasing so this is yet another reason your credit score is such an important record that must be repaired and improved. Previous claims and data such as liens, bankruptcies, and the ratio of debt-to-credit limit on credit cards heavily impact this score. Insurers use this score, in conjunction with your CLUE report and driving record, to set rates when you apply for a policy. You can see your score at www.choice-trust.com for $12.95, which includes access to your Equifax credit report for 30 days. If you are denied coverage because of your score, you may qualify for a free copy of this report. You should avoid small or unnecessary claims and should correct any errors on your report. Your CLUE report is the history of claims you have filed with insurers over the past five years. You might have two such reports, auto and homeowners. Auto CLUEs contain the date the claim occurred, type of claim (collision, injury, property damage, liability, etc.) and cost to the insurer. This report includes all insured losses, including car theft and towing. It doesn't include auto-club or AAA claims. Homeowners CLUEs contain the date claims occurred, claim type (fire, wind, burglary or catastrophe) and how much the insurer paid. Homeowners CLUES are generally used in two ways. When buying a house, you may ask the seller to obtain a copy of the home's report so you can see the claims history for that house. If you are shopping for new coverage, companies will pull your personal CLUE report, which is your history of your own insurance claims. You can get a copy of your CLUE report at www.choice-trust.com or by calling 1-800-527-2600. If you find an error on your report, write to C.L.U.E. Inc. Consumer Disclosure Center, Box 105295, Atlanta, GA, 30348. Insurers also use something called Medical Information Bureau Report, which is an overview of your medical history for the past seven years. This report contains codes identifying 230 broad categories related to medical conditions you have been treated for in that span. Non medical items, including negative marks on your driving record, participation in hazardous sports or occupational activities may also appear on this report. About 20 percent of all consumers have such a file including those who have applied for private (non-employer sponsored) life, disability, health or long-term care insurance. Insurers use this report to determine your insurability, identify potential pre-existing conditions and detect possible fraud in insurance applications. You can obtain a copy at www.mib.com or by calling 1-866-692-6901. Errors on this report must be corrected in writing.
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