topic Re: BAFFLED and CONFUSED in Credit Cards

BAFFLED and CONFUSED

FocusedAndDetermined — Mon, 08 Apr 2013 01:40:38 GMT

According to Credit Karma my credit (FAKO) score went up 3 points, but my auto insurance score dropped 44 points. How is this possible? Any insights will be greatly appreciated.

Re: BAFFLED and CONFUSED

wche — Mon, 08 Apr 2013 01:42:28 GMT

CK is a FAKO score and you should take them with a grain of salt. Could be a number of weird factors, but I would not worry about it.

Re: BAFFLED and CONFUSED

Anonymous — Mon, 08 Apr 2013 01:44:59 GMT

Personally - and this is just me - but according to Credit Karma my insurance "score" is way in the tank. I've never made an insurance claim in my life, never had an accident in my life (or been involved in one), never had anything except a few parking tickets - from 20 years ago, etc. Despite what their score says, I've NEVER had a problem getting auto insurance at super great rates. So F their score. I personally wouldn't pay it any mind.

As for their "credit score": ditto. Pay it no mind.

Re: BAFFLED and CONFUSED

RSCo — Mon, 08 Apr 2013 01:49:38 GMT

@Anonymous wrote:
Personally - and this is just me - but according to Credit Karma my insurance "score" is way in the tank. I've never made an insurance claim in my life, never had an accident in my life (or been involved in one), never had anything except a few parking tickets - from 20 years ago, etc. Despite what their score says, I've NEVER had a problem getting auto insurance at super great rates. So F their score. I personally wouldn't pay it any mind.

As for their "credit score": ditto. Pay it no mind.

Mine did the same thing... I noticed this when I opened a few new cards.. For some reason my score went up, and my ins score plumeted over 80 points.. Its like they ding you because they think, okay know, that you're going to be on the road more working over your new cards...

Re: BAFFLED and CONFUSED

FocusedAndDetermined — Mon, 08 Apr 2013 01:52:33 GMT

Thanks everyone. I will rest a little easier with this info.

Re: BAFFLED and CONFUSED

FocusedAndDetermined — Mon, 08 Apr 2013 01:53:09 GMT

@RSCo wrote:
@Anonymous wrote:
Personally - and this is just me - but according to Credit Karma my insurance "score" is way in the tank. I've never made an insurance claim in my life, never had an accident in my life (or been involved in one), never had anything except a few parking tickets - from 20 years ago, etc. Despite what their score says, I've NEVER had a problem getting auto insurance at super great rates. So F their score. I personally wouldn't pay it any mind.

As for their "credit score": ditto. Pay it no mind.
Mine did the same thing... I noticed this when I opened a few new cards.. For some reason my score went up, and my ins score plumeted over 80 points.. Its like they ding you because they think, okay know, that you're going to be on the road more working over your new cards...

LOL

Re: BAFFLED and CONFUSED

sarkell — Mon, 08 Apr 2013 01:55:20 GMT

The score is pointless imo just makes no sense I've had one claim in last 5 or 6 years no tickets etc.

Re: BAFFLED and CONFUSED

L0RDAVENTAD0R — Mon, 08 Apr 2013 01:57:36 GMT

As others have said CK & any other FAKO score isn't anything to lose sleep over. All of my FAKO scores are 20 - 40 points below my actual FICO scores. But for some it is the other way around.

Re: BAFFLED and CONFUSED

Anonymous — Mon, 08 Apr 2013 02:19:52 GMT

@sarkell wrote:
The score is pointless imo just makes no sense I've had one claim in last 5 or 6 years no tickets etc.

The insurance score is nothing to do with driving experience (claims or tickets), purely based on credit record. The justification is that some types of credit activity, different from that scored by FICO, can help insurance companies predict risk. Several states, including my MA, have laws preventing this being used in setting premiums, but many other states have not. So, for auto insurance, this really might not be a FAKO.

But it does seem very strange, my Vantage is apparently the max 990, my insurance score varies from Poor to Fair (or whatever the level above Poor is called).

Re: BAFFLED and CONFUSED

HiLine — Mon, 08 Apr 2013 02:22:07 GMT

bs6054, are your FICO scores in the 800's?

From my observation, higher credit limits lead to lower auto insurance scores...

Re: BAFFLED and CONFUSED

Anonymous — Mon, 08 Apr 2013 02:24:22 GMT

@HiLine wrote:
bs6054, are your FICO scores in the 800's?

From my observation, higher credit limits lead to lower auto insurance scores...

No, my last pull, about two weeks, was the EQ report here, about 777. Two HPs for Citi since then, so probably a little lower!

Re: BAFFLED and CONFUSED

Anonymous — Mon, 08 Apr 2013 02:27:44 GMT

I'm at a complete loss as to how to explain CK's insurance score. They show my Transrisk score as 774, which is "Excellent," but my Auto Insurance score at 840, which is "Fair." I have a safe driving record and a good driver discount with my insurance company, so I can't understand the discrepancy. It would help if they gave us an idea of the metrics that they're using to calculate the insurance score, but I don't see it. I would just take CK's score with a huge grain of salt.

Re: BAFFLED and CONFUSED

Anonymous — Mon, 08 Apr 2013 02:31:12 GMT

I've got a really high insurance score, and that obviously does not make any sense.

Within the past 2.5 years, I've gotten over 3 speeding tickets (1 of them being 99mph on I-5 w/ speed limit at 70). I've gotten into accident once, but it wasn't my fault.

However, my insurance premiums are really high because of my speeding tickets

Re: BAFFLED and CONFUSED

Anonymous — Mon, 08 Apr 2013 02:39:18 GMT

@Anonymous wrote:
I'm at a complete loss as to how to explain CK's insurance score. They show my Transrisk score as 774, which is "Excellent," but my Auto Insurance score at 840, which is "Fair." I have a safe driving record and a good driver discount with my insurance company, so I can't understand the discrepancy. It would help if they gave us an idea of the metrics that they're using to calculate the insurance score, but I don't see it. I would just take CK's score with a huge grain of salt.

Again, NOTHING to do with driving record, all credit based. Here is their own explanation:

http://blog.creditkarma.com/credit-101/insurance-scores/whats-up-with-my-auto-insurance-score/

Some key extracts:

The auto insurance score—also called a credit-based insurance score—is a three-digit number meant to predict the likelihood that you’ll file an insurance claim. The auto insurance score you receive on Credit Karma ranges from 150 to 950, and it’s calculated using data from your TransUnion credit report. However, it is not the same thing as a credit score. Also, it has nothing to do with your driving record.

It’s also important to note that these scores are not used to predict whether or not you’ll pay your premium; they’re meant to predict whether or not you’ll file an insurance claim. In other words, they attempt to estimate future losses to the insurance company instead of your future payment behavior.

It might seem strange that your credit history can be used at all in setting insurance premiums, but there are reports to back it up. A 2007 FTC study found that these insurance scores are effective predictors of risk.

Re: BAFFLED and CONFUSED

FocusedAndDetermined — Mon, 08 Apr 2013 02:40:47 GMT

Thanks all! This confirms my thoughts that something was rotten in the state of Denmark. I shant give it another thought.

Re: BAFFLED and CONFUSED

Open123 — Mon, 08 Apr 2013 02:51:12 GMT

The auto insurance industry uses certain factors they've determined to correlate with a higher probability of making a claim.

From my understanding, this score is based more on the "avg" claim amount rather than the probability of a mishap. They use one's driving record to price the risk of a physical accident and the credit score to price the risk of the average claim. I've no idea how they come up with this scoring, since it's all private data shared within the industry and not subjected to Federal fair credit consumer regulations.

According to insurance carriers, I have heard from their claims experience, those opening "more" credit cards has a higer correlation of making claims more frequently and in higher amounts per average claim.

My auto insurance score is 835; it hasn't changed since the day I signed up with CK.

Some States including CA have outlawed this practice to the extent that in CA an insurance is forbidden to even request an applicant's social. However, I'm sure some companies have methods to circumvent this an acquire an estimate of the applicant's credit score through other means.

Re: BAFFLED and CONFUSED

Open123 — Mon, 08 Apr 2013 02:58:22 GMT

@Anonymous wrote:

The auto insurance score—also called a credit-based insurance score—is a three-digit number meant to predict the likelihood that you’ll file an insurance claim. The auto insurance score you receive on Credit Karma ranges from 150 to 950, and it’s calculated using data from your TransUnion credit report. However, it is not the same thing as a credit score. Also, it has nothing to do with your driving record.

Also, one of the largest factors which drive up the cost of insurance in the auto industry are fraudulent claims.

For example, a person is rear ended; sees an attorney; takes time off from work; goes weekly chiropractic therapy for the next year. Back pain and whiplash is so nebulous an affliction, it is impossible to disprove. I'm sure many insurance companies from claims experience would (rightly or wrongly) place those with lower credit scores to have less compunction to engage in this type of fraud.