Great article from the baywatch page about insurance scoring. The webpage is www.geocities.com/insurance_credit_scoring The gentlemen that wrote the article offers proof (and theories) why insurance credit scoring plays such a key role in determining our premiums in this day and age. Dani
Can anyone quote a simple short easy to understand section of text that shows a direct correlation between a individuals credit score and the likelihood of being in a automobile accident?
ALL LIES!!! You have BAD CREDIT...you will have many accidents...many tickets...many claims... WHAT, YOU HAVEN'T HAD ANY IN 25+ YEARS...OH YOUR LYING!!! Having a blow-out on your car can cause an ACCIDENT~~~BUT HAVING BAD CREDIT CAN'T IN ANY WAY CAUSE AN ACCIDENT!!! ...OH, I GOT MY F.I.C.O. SCORE TODAY...I LOST 50 POINTS...IT'S TIME TO GET A TICKET!!! LET'S PARK THE CAR UNDER THE TREE SO THE TREE WILL FALL ON IT WHEN I CUT IT DOWN SO WE CAN HAVE A CLAIM!!!
No, no one can. But they are going to have to do it for the MN department of insurance, or they won't be able to use it at all. More states will follow. Let your state's insurance commissioner know how you feel!
Interesting article! But can anyone explain to me why it's bad to pay off a car loan early? The article alludes to that in several places but doesn't explain it further. ellen
my house insurance with Farmers was $998 in May 1998, May $1078 in '2000. I had an active Chap13 BK during both renewal periods. Filed June 1996, was not discharged until Dec. 2000. Farmers pulled CR for house insurance and my house insurance jumped to $1800 in '2001. With the mold increases in Texas, and God knows what else they have conjured up, my premium has jumped to an unbelievable $2350 per year. I retained the policy, kept it while I am trying to clean up my TU score as best I can. I don't know if I can get anything better, and I felt I had to renew until I can possibly <<<, though not probably,>>> find something better. I need to go have a heart to heart with the agent, make certain he's given me credit for alarm system, having auto with them, raise my deductible, etc. etc. He knows why, but says he is powerless to impact the rates. But I have really been depressed over this insurance fiasco, and no one seems to be able to help. I feel totally stuck. My auto insurance for myself and 20 yr old daughter, 2 vehicles, 6 months policy, jumped from $165 per month in 1998 to $285per month in '2002, and my driving record and hers is still the same, no tickets/no wrecks since a minor fender bender in '98. All I have is the 13BK that they didn't care anything about until they started pulling CR's. And Ihave been a customer for 21 years, consecutively. can't believe I am paying this percentage of my take home pay for insurance !!! but what else can I do? we have to drive, and we have to have house insurance... I guess I should just be grateful that the seven years on my Chap13 BK will be up in June of 2003, and maybe this insurance nightmare will over for me, though I feel compassion for anyone who has to suffer through it beyond that. I think that scores up/BK falling off will happen sooner than getting the Insur. Commish in our state to do something, or to have the State Legislature, (which doesn't even meet until '2003 ) do something about this raping and pillaging. This should be a WOR OF WARNING *****, though, to anyone who is thinking of filing BK. When I filed in '96, I thought I had no way out, the CCCS's couldn't help (too much debt and not enough resources at the time) and I thought I could suck it up for 7 years, and rebuild my credit. And I am working on it, been debt free since Dec'2000 other than my mortgage and a Sallie Mae loan for my daughter at 5.75% for 6K. What's important to note is that just because a set of guidelines are in place today that impact you if you have a BK on record, doesn't mean that those "guideline", rules, or policies" can't change tomorrow if the right paperwork is in place by those in power to affect such things. The insurance companies in '96 in Texas were not using scoring for their rates. Now they are, and Never in my wildest nightmares did I envision getting caught up with skyrocketing insurance for auto and home. <<And again, I guess I should be grateful that these inflated rates only started to impact me in '2000.>> Just be aware: You will pay, pay, pay if you are in a state that allows CR's to be pulled by your company or potential insurance company. Hope this will assist in alerting other to be at least a little more informed as to what they will be getting themselves into if they declare a BK.
SC4173 First, I would live to venture a theory that, for some, filing a chapter 13 bankruptcy is worse than filing a chapter 7 bankruptcy. This is because, wile the severity of the damage on ones credit is worse with a chapter 7, a chapter 13 takes generally takes longer to recover from. Perhaps you could direct the auto insurance question to the Breeze but would it be cheaper for your daughter to get her own policy. Perhaps Progressive would be cheaper. Another tactic that others could use to delay higher rates is to get auto insurance for 1 year at a time before they file a bankruptcy. Have you gotten a secured credit card to raise your score? Good luck. Erik.
Sorry to hear about your insurance troubles. Honestly, the mold issue in Texas is probably as big a factor as the credit. I'm not trying to downplay the credit problems, but many companies are completely leaving the state of Texas because of the high claims with the mold problem and the fact that the state of Texas will not intervene and give the insurance companies some leeway. Have you checked with the Texas insurance dept.? I believe that all states have an "assigned risk" program for both auto and homeowner's, and although people don't like the phrase "assigned risk" it can usually save you some money. Alot of the time, the state is guaranteeing parts of the coverage in the assigned risk probgrams, and it lowers your premiums substantially. Farmer's is verrrrrrrrrrrry heavy in the credit scoring aspects - much more so than some of the other, smaller companies. A lot of the small regional companies can't afford the costs of constantly pulling credit reports, so they just don't do it. It's expensive!! Here is information on the automobile assigned risk program, but I don't see one for homeowner's....yet. I am sure they will have to form one, if they haven't already - call and ask. http://www.taipa.org/
I have gotten offers for Secured cards from Orchard, and unsecured cards from Household and Capitol One. Even got a call today from KMart Mastercard for an unsecured card. But no, to date, I have not applied for anything. I have my debit card, and pay cable TV/electricity/phone/gas/city, etc with it. I pay my mortgage and the Sallie Mae loan on the Web electronically deducting it from my account. I guess I have been scared to apply for a card with the sole purpose of trying to raise my score, not knowing what I could get, and not wanting to get turned down. My daughter was issued a Platinum Bof A "Student" Visa this week with a credit limit of $1500. She set it up when she applied for me to be listed as an authorized user on that account. I don't know if that is good or bad, she didn't ask me, they just asked if she wanted anyone else on it, and she said me. Our bank accounts have been linked at Bof A since she was 14, never a worry there. And this is pretty wild, since I can't even get a secured Bof A card with the 13BK...they told me that since the secured cards become unsecured with a status of 12 month satisfactory pays, and since they do not grant nonsecured cards to those with BK on their CR's, B of A is not an option for me until the BK falls off in '2003. my scores are currently in the low to mid 600's. I have a collection noted...the local library, no less...but that's another posting query. I have several disputes in progress, but nothing that will substantially raise my score other than that damned collection acct for $80. What card (s) do you suggest I apply for? is it better to go with one of the offers I receive in the mail or it is better to scope something out online? thanks for the input... (I emailed breeze some questions about the insurance...)
Maggie75 You could go ahead and apply for either the Household or the Capital One credit card. I don't know if you will get approved. Credit score low to mid 600's? If you decide to go for a secured credit card , it is best to get one from a credit union if you are a member of one or can join. Here is a link to some online offers for secured credit cards. http://www.cardoffers.com/reviews/c...&apr2=9999&intro=9999&Submit.x=37&Submit.y=12 The Orchard card looks like one of the better ones. Before you apply, you may want to call them up and make sure they report to at least one credit bureau. Secured credit cards tend to have awful terms. The main things to look for is to get a float period (25 days to pay) and to get a card that does not charge a monthly fee. Good luck.
Hi All, I am the author of the website on insurance credit scoring, yes, we women can figure these things out too! Anyway, I just was looking at where some new traffic was coming from and was surprised to see so much posted already and I will be sure to read them all on Monday. Quickly though, Ellen- Paying in installments for a car or two on your credit record is good for your insurance credit score. The most important thing to remember is that insurance credit scoring does not use the traditional "creditworthiness" lending guidelines. They are not rating whether or not you will pay back a loan. So it is different from a mortgage loan or an auto loan. They (the study) took 3 years worth of claims, and pulled the credit reports of everyone who filed a claim. The noted the credit characteristics of these people. Such as: do they have a mortgage? how many car loans? how many credit cards? any late payments? any collections? and so on. Then they measured what kind of credit "characteristics" the people who filed claims had. Once they found a common thread, they ran with it. There is only one documented study available that shows any kind of correlation at all. There have been no independent studies. The other so called studies are in-house within the insurance company and thus they will not share the data, how they got it, the results, nothing. As I said, I will address more Monday. Feel free to post any questions about what I have said here. Maggie - I would like to speak with you further. Take care and have a great weekend. Sara The concerned consumer www.geocities.com/insurance_credit_scoring
As geocities is down, I have not been able to read your posting but something leaps out at me in your posting above. You state that the insurance companies pulled the credit reports of everyone who filed a claim and looked for common threads. Did they pull credit reports for anyone who had not filed a claim during the same 3 year period? A hypothetical example: from the people who filed claims, they found that 35% had 2 or more 30 day late payments. Therefore they could conclude that anyone who has 2 or more late payments presents a greater insurance risk. But what happens if the people who have not filed a claim also show 35% with 2 or more late payments? By this example, late payments would show no correlation to filing a claim. Additionally, I have to wonder how they determine risk level by not having a control group (i.e. the people who did not file claims)? In the above example, let's say people who did not file claims were actually at 30%. This creates a 5% spread between the two which could be priced accordingly. By not knowing the spread, how can you price risk? Using a national average would be misleading because that pool includes those who do not have insurance. Again, I have not been able to view your website so it's possible that some of these issues are addressed but if the facts as you state them are correct, I must question if the study was one sided. It's fairly well known that poor people and those with weak credit often do not complain when they pay above average pricing. Is this a ploy to raise rates on those who will complain the least?
I want to talk to you after you have seen the study!! The study was ordered by the insurance company and the complete study is available on my website once geocities is done with their maintenance. Yes, that is it exactly. Not only are they raising prices and making the consumer feel guilty because they have poor "insurance" credit scores (this does not mean bad credit!!!), they know that people do not like to talk about credit and this really works to their advantage. Believe it or not, this is the same with driving records. There is proof that insurance rates should be based only on the number of miles an insured drives per year! But again, they can make the consumer feel guilty about being a "bad driver". There are alot if misconceptions about insurance out there and I am tired of being rated to make sure the CEO of my insurance company continues to make $280 million per year. Something has to stop this corporate greed that is undermining the values that America holds dear. This is a practice that declares you guilty and does not give you the chance to prove your innocence. Accidents are random and unexpected, that is the very nature of an "accident". Credit will tell them in no way whether there will be an accident, it just tells them whether or not you are in a financial position to cover the accident and NOT file the claim with the insurance company. Be sure to read the Q&A and Pure Speculation pages. Maggie - see the 'In Texas' and 'Texas Homeowner's' pages. I invite any questions, comments, suggestions and input. When consumers get together and put their minds to these things, then the truth can be gotten! More later all!! Take care, Sara
Houston Guy, The study uses 'loss ratio relativities'. Generally, a company can tell how good it is doing by measuring losses. So companies take the total losses they pay out and divide by premium, and express as a percentage. This is called "loss ratio". This loss ratio measure is they way to look at customers and how they impact profitability. The correlation is between credit characterisitcs and loss ratio relativities. However, this is the only way claims and credit correlate. They claim the data sets only allow them to do it this way. Thanks and take care!
Re: Insurace scoring article erik776 | 222 posts since Apr 2002 66.26.36.11 | 05.16.2002 @ 23:25 Can anyone quote a simple short easy to understand section of text that shows a direct correlation between a individuals credit score and the likelihood of being in a automobile accident? ===================== There is no no such thing !!!!!!!!!!!!!!!!!!!!!!!!!
breeze | 5327 posts since Feb 2001 205.252.74.25 | 05.17.2002 @ 11:54 ````````````````````````````````````````````````````````````````````````````````````````````` 1*A lot of the small regional companies can't afford the costs of constantly pulling credit reports, so they just don't do it. It's expensive!! ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 2*Sorry to hear about your insurance troubles. Honestly, the mold issue in Texas is probably as big a factor as the credit. I'm not trying to downplay the credit problems, but many companies are completely leaving the state of Texas because of the high claims with the mold problem. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ ================================ 1*So not only do they fraudulently over bill you based on bogus scores but you get hit again to cover the cost of pulling reports that have no connection to insurance. Gotta hand it to Em even the mob couldn't do better.! ----------------------------------- 2*So why is mold in my home a legitimate reason to jack my car insurance out of sight? This is worse yet if I don't even own a home.
HoustonGuy | 58 1A*A hypothetical example: from the people who filed claims, they found that 35% had 2 or more 30 day late payments. Therefore they could conclude that anyone who has 2 or more late payments presents a greater insurance risk. 1B* But what happens if the people who have not filed a claim also show 35% with 2 or more late payments? By this example, late payments would show no correlation to filing a claim. ************************************ 2*Is this a ploy to raise rates on those who will complain the least? ================================== 1B* An even more interesting observation: What if 45% in this group were late 3 or more times? 2*No it's a scam to bilk as many folks as they can no matter how much or how little one complains.
HoustonGuy | 58 A hypothetical example: from the people who filed claims, they found that 35% had 2 or more 30 day late payments. =============================== So do you think that folks decide to file a claim based how many times they have paid late? Do you believe that a person who suffers a loss thinks to them selves hay I have never been late so I wont file the claim? This illustration alone shows credit reports for insurance is nothing but a HOAX.
