store card closed and question about insurance credit worthiness

[superjeep]

1. I just received a letter from a company where I opened a store card a few years ago that said they were no longer offering the card because they were no longer contracting with the card's creditor. I rarely used the card and had a zero balance so that isn't an issue. My question is how will this effect my credit since that account is closed even though I was not the one who closed it?

2. Twice in as many years, I have received a letter from my car insurance carrier saying my rates are being adversely affected by my credit. It gives no other info. I have had the same insurance since I started driving twenty years ago. The info. on my reports is accurate and the only negative is my high card balances. My average credit score of all three bureaus is 730. This has been consistent for years. So, is this something new insurance is doing? Are they obligated to tell me what my rates would be otherwise? I can't imagine my credit standing causing this issue.

Thanks for your help.

[HoldingOntoHope]

Insurance companies look at credit profiles differently than credit card companies. There is a specific FICO model for insurance that is not available for purchase by consumers and I have not seen a lot of discussion on these boards that relate to what are the positive and negative factors that affect the insurance score. I know at least one of the FAKO sites (Credit Sesame?) offers an "Insurance Score" and I have seen my credit score and insurance score go opposite directions. But as with all FAKO type scores I have no idea how the FICO score is affected.

Best you can do is shop your insurance around to several companies and go with the one that fits you best. Just because your credit is not giving you "Optimal rates" doesn't mean it is a large factor in your rate. I don't have a 760+ FICO score so I don't necessarily get "Optimum rates" on all my credit products. But I get pretty decent choices when I do apply for credit. E.g. - my mortgage is @ 3.00% for 30 year fixed.

Edit to add: As far as the store card goes until it was a very large part of your overall credit lines it should have little or no effect. It means that when it is reported closed you will lose that as part of your overall credit limits, and if you carry balances your overall utilization could go up.

[Downto0]

Best you can do is shop your insurance around to several companies and go with the one that fits you best.

This sucks because your fico score will likely go down because of all the inquiries, which are hard pulls.  It's different with your own insurance company because they usually do an account review, which is a soft pull.

I don't know of any solution but just wanted to let you know that hard pull inquiries from either insurance companies or car dealers sending loan applications to banks will probably affect you score.

So, is this something new insurance is doing? Are they obligated to tell me what my rates would be otherwise? I can't imagine my credit standing causing this issue

They've been doing it for years...probably at least since you've been driving.  Your insurance provider probably pulled a report when you applied with them and you did not even know it.  It's all part of that, "I'll run the application through". 

I don't think they are obligated to tell you what your rates would be if your cr was viewed as better but they are required to tell you if they take some adverse action because of your credit report.  The problem is that the consumer does not have a private right of action to sue if they don't inform you of an adverse action.  You would have to complain to the FTC and they might sue, but probably not.

I agree that how you deal with your finances doesn't have anything to do with the way you drive.  I see it as just another way for the rich guys to milk another dollar out of us.  It's part of that "laundry list" they go to for more points against you which allows them to legally charge you more.

Yep, the rich get richer.