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Chapter 9. Insurance and Your Credit Sco... > What Goes into an Insurance Score - Pg. 83

Insurance and Your Credit Score 83 But Boyd couldn't vouch for how an insurer's custom score might treat inquiries, and the insurers who use custom scoring say such details are proprietary information. Insurers are doing themselves no service by failing to explain the rules to their customers--partic- ularly those who have good credit. As Boyd notes, someone who has bad credit might just accept a high premium as fate, but someone who has good credit is likely to react badly, even if they're just being shut out of the insurer's top tier of customers. "Instead of getting an A, they got an A­," Boyd said, "and they're the ones who are going to start asking questions." Insurers insist that credit-based scoring helps more people than it hurts. They say responsible pol- icyholders pay less for their coverage than those who are more likely (in the insurers' view) to file a claim. Indeed, some of the people who have written to me about their insurance scoring experience had happy news: "I've been working hard on paying down debt and just bought a house this year," wrote Christopher of Lancaster, Pennsylvania. "About four months ago I got my new insurance premium bill in the mail and noticed that it was significantly cheaper then what I was paying before. Nothing had changed but my credit rating . . . . This was confirmed by my State Farm agent. [Insurance scoring] is a good thing." What Goes into an Insurance Score It's hard to be definitive about what does and doesn't affect your insurance score. Many big insurers have their own credit-based scoring models, and they're not talking much about how those work. Fair Isaac is talking some, but its formula doesn't dominate the insurance scoring world the way its credit score does the lending world. But some information is better than nothing, and Fair Isaac is willing to share some of the details of