Insurance Companies Use Credit Scores
To Inflate 'Risk' And Policy Costs
Hallelujah! It's downright heartening to hear the National Assn. of REALTORS® embrace a cause that will benefit the consumer. Such is the case with NAR's objection to insurance companies' use of credit reports in underwriting:
"There is no conclusive evidence that a person’s credit score has anything to do with the likelihood he or she is a bad risk. Studies that supposedly show such a link have been questioned by many experts. For example, those studies relate only to claims made, not to whether a person actually caused the loss."--NAR
Insurance companies are tapping the creative genius in their ranks to reduce their risk and increase their bottom line. Some firms have started to log "inquiries" and use them in underwriting decisions, even in the absence of actual "claims." Lesson: Be careful not to call the insurance company with questions.
Kudos to state legislators who have advanced proposals to check these trends.
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