How Insurance Companies Can Use Your Credit Information

Nowadays, it seems that so many facets of life hinge on having a good credit score. Few people realize, however, that you credit score can impact more than your ability to secure a loan for that shiny new car or secure low auto refinance rates for your current vehicle. It also can affect what auto insurance premium you will end up paying for that new car. Thanks to the Fair Credit Reporting Act, it is legal for insurance companies to check into an applicant’s credit when deciding whether to issue a new policy or renew an ongoing policy. This practice is common for all types of insurance, including auto and homeowner’s. It is also legal to use a policy holder’s credit to determine what insurance premiums that individual will need to pay.