Does using credit information penalize minorities or low-income consumers?
We do not know. Insurers say that there is no difference in insurance credit scores among different income levels. They say there are just as many financially responsible low-income consumers as there are financially responsible high-income consumers. They also say that factors such as income, gender, marital status, religion, nationality, age, and location of property are not used in their insurance scoring models. Consumer groups believe the use of credit history may have a greater impact on minorities and low income people. These groups cite studies of lending practices which suggest that minorities and low income people are often targeted by sub-prime lenders, which tends to have a negative impact on their credit history. Consumer groups worry that insurance credit scores will be lower for low-income and minority groups — regardless of whether data are used differently. Consumer groups also point to the fact that the industry will not make their insurance scoring models public so c
