Almost all auto insurers -- 92 out of 100 polled in a recent survey by the research firm Conning & Co. -- and an ever increasing number of companies writing homeowners insurance are now using credit information to decide whether to issue a policy on your car and/or home and what premiums you will pay if they do issue a policy.

The insurance score, which is most often used by insurance companies, was created by FICO and is referred to by different names at the different credit reporting agencies, "InScore" at Equifax, "Fair Isaac Insurance Risk Score" at TransUnion, and the "Experian /Fair Isaac Insurance Score" at Experian. This is the most recent product offered by Fair Isaac and is a credit-based insurance score. Like all FICO scores, the higher your score, the less risk you represent and thus, the lower your insurance premium. There are no provisions in any state that prevent insurers from obtaining your credit report before they sell you a property/casualty policy, according to National Association of Independent Insurers (NAII). Auto insurers maintain that the lower a driver’s credit score, the more likely they are to file an insurance claim. Regardless of your driving history or any loss claims ever bing filed.

Homeowners Insurance and Your Credit Score,

Homeowners insurance is a requirement for almost any type of home purchase made these days. Mortgage underwriters want to protect their investment as much as the homebuyer does. And just as lenders determine your loan interest rate and terms largely on your credit score, insurance companies now also include your credt score to determine how much to charge you for home owners insurance premiums.

Auto Insurance and Your Credit Score,

Most insurance companies are now basing the cost of your auto insurance policy in part on your credit score. Missing as little as one or two payments on a credit card, or other financial obligation, can lead your insurance premiums to as much as double. If your credit score is not up to par you could pay much more when getting an insurance quote. Regardless of the time you've been with your insurance company, or your actual loss history, a low credit score will lead to higher premiums or even the possible loss of your insurance policy all together.

Here is a quick look at how certain actions can affect your credit score. These numbers were reported by FICO and make certain assumptions about the number and types of accounts being reported in each case. People with the same credit score can have very different credit profiles: more or fewer accounts, a different mix of accounts, a longer or shorter credit history, use of more or less of their available credit, etc. This illustration is only intended to be a guide you can use to estimate your individual circumstances with.

Action	Effect on a 680 score	Effect on a 780 score
Maxed-out credit card	-10 to -30	-25 to -45
30-day late payment	-60 to -80	-90 to -110
Debt settlement	-45 to -65	-105 to -125
Foreclosure	-85 to -105	-140 to -160
Bankruptcy	-130 to -150	-220 to -240

The chart provided below shows the average lowest annual premiums offered to drivers in each age bracket, then breaks that bracket down by credit score range. The following data assumes drivers with no accidents and no tickets.

16 to 24	$3,152	25 to 34	$1,938	35 to 44	$1,818
500 to 649	$2,692	500 to 649	$2,023	500 to 649	$1,906
650 to 749	$2,387	650 to 749	$1,658	650 to 749	$1,632
Above 750	$2,515	Above 750	$1,155	Above 750	$1,127
No credit file	$4,191	No credit file	$2,182	No credit file	$2,048

45 to 54	$1,614	55 to 64	$1,446	65 and over	$1,461
500 to 649	$1,729	500 to 649	$1,599	500 to 649	$1,727
650 to 749	$1,449	650 to 749	$1,337	650 to 749	$1,512
Above 750	$1,032	Above 750	$968	Above 750	$1,057
No credit file	$1,787	No credit file	$1,447	No credit file	$1,656

**The original source of information can be found at CarInsurance.com.

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