Edward E. Hall & Company
Credit Rating and Insurance Premiums
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CREDIT RATING AND INSURANCE UNDERWRITING

A big factor in determining the premium of a personal auto policy has nothing to do with a person's driving record--it's his or her credit record. According to Conning and Company, more than 90 percent of insurers use an applicant's credit history--his or her insurance risk score--to slot him or her into a certain program.
When a person applies for auto insurance, the insurer asks for permission to pull his or her credit information. The insurer then secures a credit report from one or more of the credit bureaus--TransUnion; Experian; or Equifax. For more information on credit reports or to secure a copy of your own report, go to http://www.credit.com.
Credit scores range from 300 to 850. If your score is below 650, you may have trouble getting insurance or you may have to pay a higher premium. In order to improve your credit score, keep in mind the following factors that influence the score.
* Payment history: The largest factor is credit and loan account payment history. A steady record of on-time payments going back several years shows responsibility.
* Debts owed: The number of accounts you currently have, including type and balance. Try to have just a few active accounts with low balances.
Published on Wednesday, August 8, 2007
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