by DanWilliams » Thu Dec 03, 2009 02:55 pm
For those of you who are constantly searching for that "holy grail" of cheap car insurance policies...a quick look in the mirror is a good start.
The majority of companies are using your credit score/profile as a means of determining an adequate price to charge you. Many companies have hundreds of pricing levels compared to a few years ago when they may have had four or five price points. Some carriers suggest that some day an individual rate will be applied to each individual.
You want a great rate just like I do. I've worked hard to protect my credit and pay my bills on time. That gets me a much bigger discount on my car insurance today than it did just five years ago.
Get a copy of your credit report. Close out accounts that are old and not used any longer. Clear up any mistakes with the vendor who provided any incorrect information. Start keeping current on accounts you may have been occasionally late with. I'd suggest that within a few short months you will see an improvement in your score. That small improvement may help you find that magical rate you've been hoping for.
The majority of companies are using your credit score/profile as a means of determining an adequate price to charge you. Many companies have hundreds of pricing levels compared to a few years ago when they may have had four or five price points. Some carriers suggest that some day an individual rate will be applied to each individual.
You want a great rate just like I do. I've worked hard to protect my credit and pay my bills on time. That gets me a much bigger discount on my car insurance today than it did just five years ago.
Get a copy of your credit report. Close out accounts that are old and not used any longer. Clear up any mistakes with the vendor who provided any incorrect information. Start keeping current on accounts you may have been occasionally late with. I'd suggest that within a few short months you will see an improvement in your score. That small improvement may help you find that magical rate you've been hoping for.
Posted: Mon Dec 07, 2009 11:33 am Post Subject:
:wink:
Posted: Thu Dec 10, 2009 05:58 pm Post Subject: insurance
Ok...TSCOPE..............that actually DOES make sense (not that what you have said in the past, about different threads HAVEN'T made sense!!..LOL). I DO know a few people who don't have the greatest driving records. Their premiums are already pretty high. ONE of them was in an accident last year..........instead of filing a claim, she just fixed it herself, so her premiums wouldn't go up.
Posted: Thu Dec 10, 2009 06:08 pm Post Subject:
Having a bad driving record is directly related to ones risk from driving. For example, moving violations are what an insurance company looks at... not something like a parking ticket. So it's perfectly reasonable that insurance companies use this info to adjust rates.
But if I loose my job and can't pay my rent on time, why should that affect my auto policy rates? It's done because I don't have a lot of money so when I suffer a loss I'm more likely to use the service I'm paying for. This is not a risk exposure... it's an increase because the insured is more likely to take the insurance company up on their promise to provide coverage!
Posted: Thu Dec 10, 2009 06:43 pm Post Subject:
Dan, I agree with what you've said, except for this part:
Close out accounts that are old and not used any longer.
I would NOT suggest closing out an old account with a zero balance. One of the more important areas of your credit score is "age of accounts." I would suggest keeping old, good reporting accounts and to occasionally charge something really small on them and then pay it off when the bill comes.
"old good credit = better credit scores"
Finally, insurance companies do NOT use "credit scores." They employ credit scores as part of an "insurance score" algorithm. More to it than just your credit score.
InsTeacher 8)
Posted: Thu Dec 10, 2009 07:12 pm Post Subject:
I would NOT suggest closing out an old account with a zero balance. One of the more important areas of your credit score is "age of accounts." I would suggest keeping old, good reporting accounts and to occasionally charge something really small on them and then pay it off when the bill comes.
"old good credit = better credit scores"
Myth. Credit cards or lines of credit with zero balances left open with no intent of not using them, does not improve your credit score. No activity on an open account does not raise your score. The maintaining of an open account with a balance drives activity and keeps a person's account in good standing. The idea of old means better is a ridiculous way of maintaining a "good' credit score unless you like to proclaim that you like debt.
Posted: Thu Dec 10, 2009 07:38 pm Post Subject:
Trench, please read the rest of my post before commenting. I specifically stated that:
I would suggest keeping old, good reporting accounts and to occasionally charge something really small on them and then pay it off when the bill comes.
This activity will help raise the score (although in a small manner) and keep the score high assuming the rest of one's credit profile is good.
InsTeacher 8)
Posted: Thu Dec 10, 2009 07:44 pm Post Subject:
Please stick to educating others on insurance matters. You are quite knowledgable in that department. :wink:
Posted: Thu Dec 10, 2009 10:02 pm Post Subject:
Trench, I also teach the Fair Credit Reporting Act and the Fair Debt Collection Practices Act. I am on the board of several credit-granting companies and serve as a professional witness in credit matters.
If you are doubting my knowledge and veracity, I suggest you check out the following link for clarification and education concerning credit:
http://www.myfico.com/crediteducation/WhatsInYourScore.aspx
It breaks down (under the remodeled FICO scoring system) the percentages of categories as to how a person's credit score is calculated based on that particular category.
InsTeacher 8)
Posted: Fri Dec 11, 2009 12:41 am Post Subject:
Great link, full of information :roll: I guess, if a person thinks and lives by the fico score. If you like debt and barrowing money, by all means use that system. But, keeping old accounts open and using them periodically is not a smart way to build credit. We had this discussion on on another thread, where you said having a high credit score will get you a better rate than someone with a zero credit score and a credit history. Again, myth. Don't worry I won't doubt your knowledge. :lol:
Posted: Fri Dec 11, 2009 12:53 am Post Subject: fico
This 'Fico thing' can be confusing. If I thought about it, on a constant basis, it would give me a headache!!..LOL I know my Credit Score has gone up and all I'm worried about (right now, anyway..) is paying down my debt each month. I know the more you pay DOWN, the higher your score will rise.
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