FINANCE NEWS

Apr 10 2017

2015 Study: How Credit Scores Impact Car Insurance Costs By State #no #credit #check #credit #cards

#free credit score & credit report data. no credit card …
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2015 Study: How Credit Scores Impact Car Insurance Costs By State

Everyone knows that auto insurance is mandatory (except in New Hampshire ). Furthermore, we know that our credit scores dictate the types of loans and credit cards for which we can garner approval. But when it comes to the connection between credit scores and car insurance, most of us are in the dark.

With that in mind, WalletHub set out to determine 1) how transparent insurance companies are in disclosing the use of credit data in underwriting decisions; 2) how transparent they are about the source of their credit data; and 3) the extent to which credit data impacts insurance policies across the 50 states and the District of Columbia.

In evaluating the importance of credit data to insurance underwriting, WalletHub obtained quotes from five of the largest auto insurance providers in the country for two hypothetical consumers who are identical save for the fact that one has excellent credit while the other has no credit. This allowed us to isolate for the role of credit in insurance policy pricing, but it is important to note that the exact credit-based pricing fluctuations discussed throughout the report may not hold true for all consumers given the multitude of other factors that contribute to the insurance policies each of us are extended. In other words, the fact that credit scores impact insurance premiums to a significant extent should be the main takeaway for consumers, rather than the exact amount of the impact.





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