Is My Credit Report Important?

Answer:

A person's financial responsibility simply reflects the way they pay their bills. Studies indicate that financial responsibility is a good predictor of future insurance claims. This means that, by using financial responsibility when evaluating applications, insurance companies are able to more accurately understand the risk involved.

When our partner insurance companies use financial responsibility, they don't actually look at the credit report. They are only concerned with the financial responsibility grouping that the customer falls into based on the information collected by the credit reporting service. The insurance companies' rating software interprets the information and reflects it in the rate offered. The rating goes on behind the scenes and the system does all the work.

Here are some facts about the use of credit by insurance companies in general.

• It is estimated that over 90% of insurance companies use credit/financial responsibility when evaluating applications.
• Credit is merely one of the factors that companies look at when evaluating applications. Others include driving history, years of driving experience, and the type of vehicle.
• Insurance company queries are counted as "soft hits," and will have no impact on your credit score.