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This can be found at http://www.ftc.gov/os/statutes/fcra.htm
If you feel that your credit history is better then the
insurer can find, make sure the insurer has your correct name,
address, social security number, and date of birth.
Some insurance companies will look directly at your actual
credit reports when determining your rate, however most will use
what is called an "insurance credit score." An
insurance credit score is developed by using statistical
techniques and methods to predict the likelihood a consumer will
have a higher than anticipated losses.
These are similar to what lenders use to predict the
reliability of an applicant repaying a loan.
Credit History Factors and Car Insurance Rates
Insurance companies use many factors in determining your
credit score. Here are some examples of those factors:
- Public records: bankruptcy, collections, foreclosures,
liens, charge-offs, etc.
- Past payment history: the number and frequency of late
payments and the days between the due date and late
payment date.
- Length of credit history: the amount of time you have
been in the credit system.
- Inquiries for credit: the number of times you have
recently applied for new credit, including mortgage
loans, utility accounts, and credit card accounts.
- Number of open lines of credit: the number of credit
cards, whether you use them or not.
- Type of credit in use: major credit cards, store credit
cards, finance company loans, etc.
- Unused credit: how much you owe compared to how much
credit is available to you.
Your insurance credit score may differ from company to
company, as they will use different factors in determining your
premium. Notice that we call it an insurance credit score. This
means that it encompasses many factors including credit.
Since each insurance company uses different techniques to
determine your credit score it is hard to tell you what a good
credit score is. Usually a good credit score will result in lower
premiums.
Your agent or company is not obligated to tell you your credit
score. In fact, they might not even know what it is. All they
usually know is that your credit score qualifies you for a
specific rate or policy. Some companies also offer better rates
under each qualifying tier.
If you feel that there is incorrect information on your credit
report, you should tell the credit bureau. If you report and
error, the credit bureau must investigate the error and get back
to you within 30 days. You can ask the credit bureau to send a
notice of the correction to any creditor or insurer that has
checked your file in the past six months. Once the errors are
corrected, it is a good idea to get a new copy of your credit
report several months later to make sure the wrong information
has not been reported again.
The Three National Credit Bureaus Are:
Tell your insurance company. Do not wait until the credit
bureau investigates the errors to contact your insurer. Tell your
insurance company right away and ask if the errors will make a
difference in your insurance.
If the errors are big, tell your insurer that you are
disputing the information and ask if they will wait to use your
credit information until the errors are corrected.
Small errors may not have much affect on your insurance credit
score. If the errors are big, it can make a significant
difference in your premium. Some companies are unable to adjust
the premiums until the score is corrected, but it does not hurt
to ask.
If you have taken the steps to improve your credit, score you
should ask your insurance company to re-evaluate your credit
score at renewal.
If You're Still Having Credit Score Problems, Can Bad Credit be Deleted?
Yes, it can. Despite the fervent proclamations of bureaucrats and credit bureaus everywhere, a simple fact remains: negative credit listings are deleted from peoples' credit reports by the thousands each and every day.
A few years ago, an attorney from Lexington Law. visited with a regulatory agency for a casual conversation with two agents. The Agency's office, as a matter of course, believed the credit bureaus' claim that bad credit couldn't be deleted. The visiting Lexington attorney asked, "How many negative listings would you have to see deleted from consumer credit reports before you would believe that bad credit can be deleted: ten? fifty? a hundred? one thousand?" The agents responded with only blank stares.
"How about 50,000 deleted listings, would that convince you?" continued the Lexington attorney. From his briefcase he pulled a stack of papers six inches high.
"In these pages, we have listed the permanent deletion of over 50,000 listings from our clients' files in the last two years alone," he explained. The agents pulled the stack across the conference table and began to pick through the pages, taking in the massive list.
"But have you deleted any bankruptcies?" shot back one of the agents, "we know that bankruptcies can't be deleted." The Lexington attorney leaned across the table and ran his finger down the first page.
"There's one deleted bankruptcy... and, there's another,... and another,... and another. Should I go on?" asked the Lexington attorney.
The agents sat back in their chairs. "You know," began the junior agent, "I have this one listing on my credit report that simply must belong to somebody else..."
How is Credit Repair Possible?
The Fair Credit Reporting Act (FCRA) allows a consumer to challenge the information on his credit report on the basis of "completeness and accuracy." When a consumer files a dispute, the credit bureaus must contact the source of the credit information (the creditor) and confirm that the information is accurate, verifiable, and not obsolete. In some circumstances, the credit bureau is required to go beyond a simple verification of the creditor's own computer record. If, within 30 days, the credit bureau has not received verification from the creditor, then the credit bureau must promptly delete the credit listing.
Learn More.
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