Insurance, especially cars, companies also determine premiums by pulling credit reports of potential policyholders. If you have a low FICO score and lousy credit they are punishing you EVEN THOUGH you might have a perfect driving record, no tickets, no accidents, no claims. This is a BS profiling. Just as bad as cops pulling over African Americans who drive around in a lily white neighborhood, and airport officials "taking a closer look" at Muslim looking folks. Just as not all African Americans will break into houses, and not all Muslims are terrorists, the insurance industry should not immediately assume that people with bad credit are higher risks.
I love their reasoning the best - If you have bad credit, you're probably not doing too well financially and thus are more likely to skip routine maintenance on your vehicle, leading to more accidents. Translation - It was another way we could rip people off, and we took it.
The way I see it is that bad credit is like having a sign on your back that says "Kick me!" You don't mind high fees, high rates, having the insurance company say no to your claims since you feel it is your lot in life. You will just walk away with your tail between your legs. Credit has no relationship to driving ability or possibly claims. (I have never seen the studies they claim demonstrate this.)
