This is getting interesting, I did a little research on 'permissible purpose' and according to the FTC opion papers it looks like USAA probably doesn't have 'permissible purpose' because they aren't pulling the credit report for a current decision on insurance. The penalty for which is as many of you know $1000 or actual damages. I sent this information to them in hopes they change their policies. As I stated to them in my letter they are HARMING their current customers while BREAKING the law and incuring LIABILITY. They were supposed to be drafting a letter for me so that the inquiry would be removed and Mr. Leatherwood said it was at a higher level than him. He wouldn't give me the phone number for the person actually drafting the letter, but I think the next time I talk to him I will insist on it.
I work in the industry, so I have arguments about this daily. LOL. The reason they are running credit scores has nothing to do with your payment plan, and if that's what they tell you, then they are lying to you. Credit scores determine which rating "tier" you qualify for, and therefore what price you pay. The insurance companies claim that people with batter credit have fewer claims and also tend to keep their insurance in force as opposed to cancelling and reinstating regularly. While this may all be true (or it may not, I don't know), the industry has had ways of verifying this kind of info in the past without credit scoring. Insurance companies have always required verification from your prior company of continuous insurance in order to get into their better rate tiers. They also, in the past, have been able to verify driving record and claims history by various reporting agencies. The two things they claim to care about (continuous coverage and claims) are already perfectly verifiable without involving credit scoring. Credit scoring is BS; it's just a new way to do the old illegal "red-lining". And by the way, each company uses a different scoring system; it isn't necessarily your FICO score, although I think a couple of them do use that. Because of the differing scoring systems, I have personally seen it happen that an individual came back with the highest available tier for one company and barely "acceptable" with another. One in particular that I can think of right now came back with an "A" for GMAC Insurance (they use a letter-system), which is their highest tier and lowest rate. The same individual came in at the "barely acceptable" level score with The Hartford (I can't recall what kind of system the use). So, there isn't really even a way to know how your score will come back. The agent who is doing the quote doesn't know, either, until he punches your social into his computer. How d'ya like them apples?
What about spouses with different scores that have the same insurance policy? Say wife is 750 (Top tier) and Hubby 640 (Middle tier). Any ideas how they handle this?
THEY WILL USE THE 640 BECAUSE THE 640 WILL HAVE MORE TICKETS AND ACCIDENTS AND BREAK ALL THE DOORS AND WINDOWS!!! ISN'T IT GREAT THAT THEY CAN "SEE" HOW YOU DRIVE BY YOUR CREDIT REPORT!!!!!!!!! THEY MUST HAVE TO SPEND $300.00 PER DRIVING RECORD FROM THE DMV...THE CRA'S MUST SELL A CREDIT REPORT AT $1.99 EACH!!!!!!
They use the score of the applicant - that is the one who is talking to the agent, or if it is an internet quote, the first name you enter into the application. And they don't need your SSN to pull credit.
