Insurance Premius rely on credit reports for setting insurance premium rates

By Texas Watch - July 12, 2007
Check Your Credit Report Every Year
81% of Credit Reports Contain ErrorsInsurance companies rely heavily on credit scoring when they set their rates. At Texas Watch, we believe that insurance credit scoring is unfair and should be banned outright. Credit scores are often based on flawed and inaccurate data. As a result, consumers see their insurance premiums increase. We will continue to push for an end to the unfair use of insurance credit scoring, but in the meantime, one of the most important things you can do as an informed consumer is to check your credit report annually.

The Federal Trade Commission now offers you a free credit report every year from each of the three major credit bureaus-Equifax, Experian and TransUnion. We recommend checking all three of the bureaus each year to get the most in-depth report possible.

This free report offers a powerful tool to consumers so they can ensure they have the most accurate credit history possible. By checking your report every year, you can check for mistakes or even fraudulent claims. 81% of consumers have some kind of error on their credit report. Mistakes on your credit report can lead to higher insurance premiums and interest rates.

You can dispute the errors on your credit report by contacting the credit bureau that reported the error. Reviewing the reports gives you a chance to see what credit agencies see when they look at your history, and gives you the opportunity to make sure your report is as accurate as possible.

Be careful when using the internet to check your credit report. There are several credit reporting websites that will charge you for their service. You can access your free credit report at www.annualcreditreport.com, monitored by the Federal Trade Commission.

If you have seen your insurance premiums go up as a result of errors on your credit score, we want to hear about it. Please take a moment to share your story with us.