How do you feel about insurance companies pulling your credit report?

Question

I live in Michigan a state where it is law to have insurance. I have also been denied insurance by a certain large insurance company based on my credit score. I just don't think they should be able to pull your credit report if your required by state law to carry it. Hey if i don't pay it cancel me.

Agreed your driving record should be all they need. I have been driving now for 13 years never been in a accident but been though a divorce which messed up my credit.

wooooowhooo..... the reason the guy with the 700 + credit score is likely to have a better track record with the insurance company is because he doesnt report it he pays for damages from his little plastic insurance policy called AMEX.... again never been in a accident got one ticket 7 years ago been though a divorce..... why do I get denied when I'm a proven good driver all because some one else isn't. shouldnt they pay more and i get charged the same as the guy next door with the same driving record and a better credit score!

besides I would love to see where these so called statistics are coming from I think its all crap!

Answer 1

I don't like the idea of them looking at my credit. I know that a lot of insurance companies look at it and will use your score as one factor in determining your rates. But I think it's a bad practice. What if you're shopping around for the best rate? Everytime a company looks at your credit score it puts a "hit" on your report. This actually hurts your credit.

Anyway, I think that your driving record should be more than enough for them. You could have perfect credit but be a terrible driver, or have bad credit and drive without ever having an accident.

Answer 2

At - INSUREGRADES.INFO- you can compare free quotes

RE How do you feel about insurance companies pulling your credit report?

I live in Michigan a state where it is law to have insurance. I have also been denied insurance by a certain large insurance company based on my credit score. I just don't think ...show more

Answer 3

I agree with you. i don't believe it has anything to do with how well a driver a person is based on the credit score. To the person who actually believes that insurance companies do this because people with good credit are less likely to get into accidents is an IDIOT! So many celebrities get into so many accidents and I'm pretty sure they have good credit. How some people can be so ignorant and think that good credit score means better driver. Good credit score just simply means that the person is responsible enough to pay his/her bills on time or does not go over 50% of their credit limit. a person with no credit at all can have a high FICO score.

Anyways... bottom line, I agree with you. It really has nothing to do with it and you're right, if you don't pay then they can just cancel your coverage. Insurance should be based on your driving record not you financial status nor your credit.

Answer 4

There are statistics that show that those who have poor credit - are more likely to have a loss. Money troubles/debt are major reasons to be involved in insurance fraud. Insurance companies are financial businesses - not charities.

Some one who is in debt - can't sell the car b/c they owe too much - are more likely to burn the car up. Need extra money - fake a theft loss.

Your insurance rates are based on risk. The greater the likely hood of you incurring a loss - the greater the risk for the insurance company that insures you.

The major factor that is considered by credit reporting agencies is your ability to pay your bills. If you just make the minimum payment on time every month - is the easiest way to pull up a bad score. If you do not pay your bills or pay late, this will pull your credit report down.

Moral of the story: people who are responsible with their money- get better rates on insurance, loans and credit cards. People who are not responsible, are bigger risks and pay more for insurance, loans and credit cards.

Grow up - quit griping and start paying your bills on time and your credit score will go up.

Answer 5

Most likely, you will be able to find insurance through a state sponsored program.

The reason insurance companies pull your credit report is due to the fact that some companies believe that if you are in credit trouble, you may be more likely to do something nasty, like burn down your house to get out of the mortgage, crash your car to get out of payments (w/ gap insurance), etc, etc.

Answer 6

definite, freezing ones credit report prevents "anybody" from gathering recommendations. here's a quote from Experian: protection freezes are designed to steer away from a credit reporting company from freeing your credit report without your consent. even nonetheless, try to be conscious that utilising a protection freeze to take administration over who's allowed get entry to to the non-public and economic recommendations on your report could postpone, interfere with or restrict the well timed approval of any next request or utility you're making touching directly to a clean loan, credit, loan, coverage, government centers or money, apartment housing, employment, investment, license, cellular telephone, utilities, digital signature, information superhighway credit card transaction or different centers, alongside with an extension of credit at ingredient of sale. so which you will ought to pay a cost to unfreeze your report in case you pick the coverage company to apply your credit to base their top type. If no longer they only could placed you into the traditional class and you may land up paying greater on your coverage. FYI to echo: If I had favourite the occasion asking the question became from VA i could have not afflicted to point a cost to unfreeze a report, i recognize there is not any value in VA besides as in another states. i do no longer spend my time snooping around others questions or solutions, get a existence! desire this enables answer your question

Answer 7

How do you feel about insurance companies pulling your credit report?
I live in Michigan a state where it is law to have insurance. I have also been denied insurance by a certain large insurance company based on my credit score. I just don't think they should be able to pull your credit report if your required by state law to carry it. Hey if i don't pay it cancel me.

Answer 8

There are a number of factors that can be indicators of a person being a good risk or bad risk for insurance. When the statistics show that over 50% of all claims (75% of auto theft claims) are exaggerated or bogus, you can better understand why your credit rating can play a role in determining if you will be a good insurance risk or not. People in financial trouble can be motivated to create a "loss" that will make them money. You'd be amazed at how many cars are dumped in bodies of water, given up for drugs, burned or otherwise intentionally disposed of in order to file a fraudulent car theft claim. I have seen people claim injuries they didn't have, claim auto theft that never happened, set fire to their own cars to cover up costly mechanical problems and lie and cheat beyond your imagination in order to solve their financial problems. YES, insurance companies need to know your financial background before they agree to insure you. When insurance companies cover cheats and liars, our premiums all go up to cover those fraudulent claims. I'm sure you don't want to pay a higher premium for that.

Answer 9

Same way I feel about them pulling my driving record.

They're both private information, and they're both proven to be an accurate indicator of future loss potential.

You're NOT required by law to have insurance, only people who want to drive on public roadways are required to have insurance. There are ways around having auto insurance - like, don't own a car, and don't drive.

Sure, it's CONVENIENT. But YOU are complaining because you were denied based on low credit score - the NEXT guy is complaining because he was denied based on his driving record.

It's not ABOUT paying the bill - it's about predicting future losses. And people with credit scores under 550 are about 7X as likely to file a claim as people with scores over 700. Just like that guy with 2 dui's, he's about 10X as likely to have an at fault accident.

Insurance companies in most states have the right to pick and choose customers less likely to file claims.

Answer 10

Be glad that they do it. It protects you, good drivers have insurance, its one of the reasons that they are called good drivers. People with bad credit have a tendency to "skip" that insurance bill and few companies will accept customers with a history of not paying bills. Your idea of "just cancel me", if you don't pay, will only hurt you & your credit.