Credit Score is Predicative. But should it be used?

[Allen Trent]

I'm sure there are other exceptions to that besides me.

I am "flush with cash." I have no mortgage, no car loans or other loans, CCs are paid in full, no running balances, no claims, tickets or accidents, 800 FICO, and have no problem getting insurance with competitive rates.

I have to go polish my horn now.

FICO sure. But many carriers algorithms bought from the vendors give them somegst lower scores & no hits on the insurance score. Especially in states that prohibit income, assets, house value, net worth being used in the algorithm that is proprietary & not shared with anyone. At least with FICO, the point system is somewhat explained in that 30% is based on credit utilization rate, 15% based on length of credit history, 35% on payment history & 10% on new credit applications. I can't remember other 10%

 

[Allen Trent]

I have to go polish my horn now

Lol, are you a CNN reporter. Jeffrey Toobin was polishing his horn too. Lol

 

[ehall2]

The scoring that insurance companies use doesn't completely track your beacon score. Companies use credit but that isn't the only thing that determines which tier you qualify for. The rating process has become so complicated that it has

 

[ehall2]

Finishing the above. The rating process has exceeded what a human can do. I have insured's that call wanting to know why their rate increased and the insurance companies can't tell why. I recently had a home insured and the rate on renewal went from $1,000 per year to $1,900 per year but the insurance company can't tell me why because they don't know. I was talking with an underwriter with a nationally known company and I mentioned this to him and he said, "you're are exactly right." He said he sat in a class on rating and they went through the process to rate a vehicle and it took all day to rate one vehicle. There are so many variables and when you take one of the variables out it screws up the rating process. The underwriter said the company told him it was like two snow flakes. They look alike to the naked eye but when you put them under a microscope that are different. Companies rate based on how long you have owned your car, how long you have been continuously been insured, how long with your current company, the limits of liability you previously had, how long at your current address. Then there is a 3 year incident free discount and a 5 year incident free discount. This doesn't mean you had an accident or violation but an incident. If you have a not at fault accident you will lose these discounts or if you have a comprehensive claim you will lose these discounts. The zip code you live at affects your rate. So, there is a lost more than a credit score. In the past if there was a teenage driver you could tell your insured to buy an old clunker and rate the teenager on that vehicle. No more. When there are multiple drivers the computer calculates a rate based on some formula and each vehicle pays more for the teenager. Some companies surcharge if you exclude a driver. What makes sense about this?

 

[Life Hawk]

I am amazed at how much society is all a tither over "justice", while on their way to the protest/arson event, their insurance company is basing their rates and or acceptance off their ability to handle money! And they have little or no clue.

Amazed at how dumb we have become. Commonsense is truly a diminishing commodity.

 

[adjusterjack]

it took all day to rate one vehicle.

When I went through underwriting training back in the stone age I did time in coding and rating. It took about 5 minutes to rate one car, maybe 20 minutes for a family with multiple cars and multiple drivers.

For auto insurance there were two manuals that got updated frequently. One contained every automobile every made and its symbol based on its cost new. The other was the rate manual with the base rates and the plus or minus percentages based on the risk factors. Home owners had only one manual. Rating a home was also quick. Agents had the same manuals and had to rate up their own quotes. Manuals were loose leaf ring binders with paper pages.

This was the calculator.

 

[Allen Trent]

When I went through underwriting training back in the stone age I did time in coding and rating. It took about 5 minutes to rate one car, maybe 20 minutes for a family with multiple cars and multiple drivers.

For auto insurance there were two manuals that got updated frequently. One contained every automobile every made and its symbol based on its cost new. The other was the rate manual with the base rates and the plus or minus percentages based on the risk factors. Home owners had only one manual. Rating a home was also quick. Agents had the same manuals and had to rate up their own quotes. Manuals were loose leaf ring binders with paper pages.

This was the calculator.

Meh--this is what I had to use to quote a Corvette so it wouldnt get the super cheap Chevette price. Univac

 

[adjusterjack]

Wow! Imagine what Tim "The Toolman" Taylor could have done with that.

 

[adjusterjack]

Interesting! Thanks for sharing these facts.

Useless comment on an 8 month old thread.

 

[Allen Trent]

Useless comment on an 8 month old thread.

Seems a little harsh.