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credit rating and insurance

Discussion in 'Other Off Topic Forum' started by UroTrash, Mar 9, 2004.

  1. UroTrash

    UroTrash Three Time F1 World Champ
    Consultant Owner

    Jan 20, 2004
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    Does any one know if paying off your mortgage and carring no debt adversely changes your credit ratings? I have heard it does.

    I understand Geico and other insurance companies use credit ratings in assessment of insurance risk and therefore premium cost.

    How ironic that being more financially responsible would increase your rates.

    I also read that the insurers came under attack from the feds for using credit ratings in this way as a backdoor type of discrimination, as theoretically, poor and less advantaged people would have worse credit ratings....I'm not making that up.
     
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  3. stokpro

    stokpro F1 Rookie
    Lifetime Rossa Owner

    Jun 25, 2003
    4,364
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    Yes, it's true. Insurance companies now use credit as a criteria to determine your premium. Pemco uses it. I have great credit, but this method is still ridiculous.
     
  4. karmavore

    karmavore Formula 3

    Dec 29, 2002
    1,641
    Maryland
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    Luke Colorado
    www.choicepoint.com

    Get your INSURANCE SCORE (based on record and credit).

    This is an ATL based company that all the big boys use.

    Luke.
     
  5. Agent Smith

    Agent Smith Formula 3

    Apr 20, 2002
    1,508
    I agree using your credit score as part of the way to determine insurance rates is ridiculous. Seems to me it's just another part of the "poor pay more" program - or discrimination like stokpro said.
     
  6. KKSBA

    KKSBA F1 World Champ
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    Oct 31, 2003
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    Maybe they figure that once your maxxed out on all your credit cards that you will all of sudden start driving fast down windy roads passing around blind corners etc... Credit can kill ;)
     
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  8. tifosi69

    tifosi69 Formula 3

    Dec 23, 2003
    1,671
    Atlanta, Ga.
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    Al-Al Cool J
    This, although seemingly funny, is partially true. The consensus is financially irresponsible people, more often than not, will be prone to poor driving, or worse yet, committing insurance fraud and other scams, to bilk the insurance companies.
     

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