How is credit scoring used by insurance companies?
If your insurance company relies on credit scoring, they may use it in two ways. First there is underwriting: deciding whether to issue you a new policy or to renew your existing policy. Second is the process of rating, which is deciding what price to charge you for your insurance by placing you into specific rating “tier” or level. Some insurers use credit information along with other more traditional rating factors, such as claims history. Other insurers may use credit alone to determine your rate; Insurance rates based on credit information can vary from company to company: if you think your rate is too high, shop around.
