Bad Credit.. Do you think persons with bad credit are worse drivers?

Question

Insurance co.'s do ,, your credit should have no barring on your rate! esp. since the state requires it! I think it's just another reason for them to charge a person MORE! I know many rich persons that crash up their car all the time!

come on people it's LAW to have insurance! They should base your rate ONLY by your DRIVING RECORD & TYPE of CAR.. !!! I have bad credit , but nothing inside 14 years of driving! NOTHING, not even a parking ticket!! This is a SCAM!!!

And to anyone that don't think your Credit has anything to do with your RATE ,, Try to get a quote without giving your SS# good luck,, !! !!

What's next are they going to charge persons with bad credit more for their Big Mac,, would that be Right?

If you pay your insurance monthly( Or whatever) your ARE paying for the service(coverage) BEFORE YOU USE IT! so NO LINE OF credit is given,, therefore If credit is not being given to you they should have NO Right to Check , look . , glance, stare, peek, or or anything with ones credit,, Now if they were giving us 6 months or a year upfront of inusrance , on CREDIT then I would understand them looking at my worthiness,, which leads up to my big mac comment,, this is like mcdonalds , looking at my credit score before they tell me the price for my big mac! I was not talking about using my credit card ,!!

LAST POINT,, TO RRM38,, BUYING A CAR OR A HOUSE YES A LINE OF CREDIT IS USED 99% OF THE TIME SO ,, I UNDERSTAND THE FACT THOSE ARE CREDIT SALES, ! AUTO INSURANCE IS NOT A CREDIT SALE PEOPLE HAVE BECOME SO BLIND TO THINK THIS IS OK ! MAYBE THEY SHOULD RUN OUR CREDIT ON ALL SPENDINGS ,, IM SURE OUR CABLE PROVIDERS WOULD LOVE THAT , ALONG WITH TRASH , WATER, ELECTRIC, ETC, ETC,, THAT WOULD MAKE PEOPLE UNDERSTAND MY POINT REAL! QUICK! WAKE UP ALL YOU PEOPLE TELLING YOURSELF THIS IS OK AND THINKING YOUR JUST SMART CAUSE YOUR HARMED BECAUSE YOU HAVE GOOD CREDIT,, WELL GOOD FOR YOU , BUT DON'T _ITCH ABOUT UNINSURED DRIVERS, CAUSE AND EFFECT,, 4TH GRADE SCIENCE

Answer 1

Shawn I agree with you and bundysmom and Bill P, here's why:

I have been driving for 20 years and have 0 tickets, and 1 NOT AT FAULT accident from 6 years ago on my driving record. I filed bankruptcy a few years ago NOT because I am of bad moral fiber OR because I couldn't pay my bills, but because all my money was tied up in a business that a partner screwed me over on and it was either file bankruptcy or have my assets taken from me (my fault for not incorporating). Now you mean to tell me because I have a bankruptcy on my record that means I'm of bad character, I'm a dead beat, and I deserve to pay MORE for my insurance because I'm going to file a bunch of claims??? Then you're just as much of an a** as the insurance companies who buy this b.s. about 'bad credit = high risk and more claims paid out.' Forget the fact I have a spotless record.

Now I'm sure Bill P does have a bunch of deadbeats that don't pay rent on time if ever in his apartment complex that he manages, so why don't you just charge them more for rent then? That was a decision you made, or someone above you made, to agree to rent out those units. But renting an apartment and insuring property are 2 totally different things. So you have a tenant who bails on the lease, you sue them & get a judgement, and THAT is fair warning to future tenants who pull their credit. There is a correlation there. There is NO correlation between bad credit and the number of claims someone files. Sorry to single you out Bill P but your logic doesn't make sense.

Answer 2

Bad credit probably means the person is currently in a bad financial situation and probably can't regulary pay their monthly insurance fee, so the insurance company probably felt that it's best to take as much from the person while the person still can give. They done this by raising the rate, in the hope they get as much from the person before the person gone bankrupt.

Good credit probably means the person is currently in a good financial situation and probably can pay their monthly insurance fee, so the insurance company probably felt that it's best to take as much from the person by lengthening on how long they can take on the person. They done this by lowering the rate, in the hope they get as much from the person by having a long relationship and multiple deals (extra this, extra that, and so on) from the person.

The same also happened to loan applications, those with bad credit get a higher rate than those with good credits. Also insurance companies and loan companies usually are under the same parent companies, that sometimes work the same way.


And really, you shouldn't think that rich people get breaks more often than less rich people, since one can take more from the rich than the less rich people.

Besides, the flamboyant rich people (the ones usually seen in the mass media) actually have a much worse credit report than the average rich people (who usually live like the average person). Do you think Donald Trump have a good credit?



As for credit report companies.

Credit report companies were established so that financial companies can have an excuse of accepting and rejecting potential customers without themself look bad, like invading privacies, were told to accept/reject certain people, etc.

Of course, what the credit report companies report depend more on who pay them and not on the credit report subjects.

Credit report companies get many of their data from financial companies.



As for the state requiring insurance.

That's because the state have strike a deal with the insurance companies. If it happened in any other country, it will be called collusion and corruption..

Answer 3

I agree with you to an extent, there are some people out there that get bad credit ratings due to things beyond their control. Some are bad business deals, bad divorces (the one with good credit getting stuck with all the bills), bad health issues, whatever. However, the MAJORITY of people with bad credit cost more to the insurance companies from cancellations, bigger claims, more claims, etc. That is what the insurance companies go by. Why aren't you complaining about the 17 yr old who pays higher rates just because he is 17? He may have a perfect driving record, never speeds, drives a sensible car & NEVER pays late, never has a claim. You don't because the MAJORITY of 17 yr olds get tickets, have claims, have worse claims than adult drivers because they tend to fool around & speed. What is the difference? Insurance is based on the laws of statistics. Insurance looks at a group, does years of research, finds a corrolation between a certain group of people (young drivers, drivers with bad credit, people who get tickets, etc) that they consistently have more claims & worse claims & guess what, they raise rates on that group.
Insurance is a very reactive industry, not a proactive industry.
Oh & maybe the rich person just goes out & buys another car & doesn't put in a claim for it.

Answer 4

You are clever, your co-employee isn't. Having well credit score could be very principal when you consider that your credit score ranking is used to examine many matters. Banks use it to examine whether or not or to not provide you a mortgage, employers often use it to examine whether or not to rent you or now not, landlords use it to examine whether or not to hire to you or now not, or even coverage businesses use it to examine how prime or how low your rates are going to be. Having spotty credit is NEVER a well factor. It manner that you're going to most commonly be denied while you follow for any kind of rent or financing or compelled to pay so much better premiums than might be to be had to a individual who has a well credit score ranking. In so much circumstances, individuals with spotty credit are required to make better downpayments and pay hefty safety deposits while shopping or renting something. The govt does now not hold tabs on anybody's credit score ranking, they usually handiest entry that know-how while jogging movements heritage assessments on govt staff, or if state or federal regulation enforcement businesses want the know-how to construct a profile on an man or woman who is being investigated for crook recreation. The credit score ranking method is privately run via the 3 impartial credit score bureaus, the banks, and the Fair Issac Company. The govt truthfully has not anything to do with it.

Answer 5

I don't think that higher insurance rates based on credit rating are in any way related to the driving skills of the insured. If a person with a low credit score manages to get a credit card, they pay a higher interest rate. If a person with a low credit score manages to buy a car, they pay a higher interest rate. Same goes for a home, or pretty much any type of credit. The reason for this is that people with bad credit are more likely to default on the creditors. A contract with an insurance company is not a whole lot different than one of the above, in that the insurance company is taking into account the risk that a person with a lower credit rating will not pay and will allow their policy to lapse. Higher risk credit rating = higher cost.

Edit:

almostmelvin - For whatever reason, I feel the need to clarify myself after reading your post. My response wasn't based on the idea that I agree or disagree with what the insurance companies are doing. I was simply giving a factual answer to the question "Bad Credit.. Do you think persons with bad credit are worse drivers? " Insurance companies do, in fact, charge a higher rate to people with bad credit because they consider them to be at higher risk for nonpayment of premiums, not because they think they're bad drivers.

I filed bankruptcy 10 years ago myself, not because of a bad business deal but rather because of a bad marriage deal. I have felt the pain of paying more for everything as a result of bad credit. I have a spotless driving record, and am not a high risk driver. I paid more for insurance (and everything else involving credit) after bankruptcy simply due to the fact that I had bad credit.

shawn - If you have bad credit and a higher interest rate credit card and you use it at McDonald's... yes, you'll pay more for your Big Mac...lol

Answer 6

OKAY, FINE, I'LL BE THE BIG, BAD MONSTER HERE.

-Yes-, your credit does effect your rate. Do know this, though: with most companies and in most states, having bad credit doesn't exactly raise your rate. They just give discounts for people with good credit. Yeah yeah, I know, same difference. Insurance companies have people called 'actuaries' that work for them. These people try to find out what factors indicate someone that could cost a company a lot of money. If they could find some way to determine that people with pink-tinted poodles were more likely to commit fraud, they -would-. Luckily that doesn't exist. Ahem. Anyway, these guys have done study after study, year after year and what they found out is that those people with the bad credit were:

A) Less likely to make their payments/More likely to have policies cancel for non-payment of premium.

What does that mean? Unknown to you, dear consumer, an insurance company spends more money on you during the time it takes to quote and start up a new policy then what you pay them for that first payment. So you make that first payment and can't make the next? Insurance company has now -lost- money due to you. Insurance is in the business of risk, but not -that- kind of risk, you know what I mean?

B) More likely to try to stiff the Insurance Company for money.

You're in a wreck, I send you a check, and you've got bills to pay. You cash said check and pay everything and oh, you kind of don't get that car fixed in the meanwhile. Car is damaged again and what do you do, admit the prior damage and that you sent that claims check we gave you over to Suddenlink for your cable bill? Think about it.

and...

C) Less likely to lead a nice, happy, violation & accident free life.

Keep in mind that credit shows responsibility. Most people aren't irresponsible in one area of their life alone. BUT, keep in mind that for the most part, the credit factor is meant to reward those with good credit since those people tend to be pretty dang responsible with everything! Having good credit, frankly, is pretty hard! There are numbers to back them up on this. The Department/Bureau of Insurance for all these states where credit is a factor demand it!

Wow, I just wrote a freaking book. Hope you enjoyed it, haha!

Answer 7

I guess they think if you have less good credit you have less to loose and will drive recklessly. Credit reports are pulled by more and more potential employers these days, its becoming an Orwellian society.


Personally I don't think they should be able to pull this without looking at the whole circumstances of the situation.

Answer 8

Your insurance credit and your credit score is two different things. Your insurance credit is based off of the chance you will pay your policy in full and keep consistent coverage. Your credit score is only used when borrowing funds (credit cards, loans, mortgages....etc) They do decrease rates based on homeownership and other responsible acts.

Answer 9

I have a good insurance rate and I have never had an accident, and my credit sucks

Answer 10

well now that you mention it they would be worse drivers because they would always be trying to see who's behind them in that car,they might owe them some money.it would be dangerous to be ahead of them.you asked a silly question that made since after i thought about it.keep up the good work.