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Improved FICO Scores = Lower Insurance Rates!

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Improved FICO Scores = Lower Insurance Rates!

After having raised my credit score from the low 500s to 700 within the past 9 months, I contacted my auto-insurance provider to see if it would affect my rate. Whenever information is corrected on your CR, you legally have 6mos to have new CRs sent to anyone who may have pulled it (12mos in some states & two years for employers). I informed Progressive of these changes and they said that while they didn't factor actual credit scores, the negative items that had been deleted would significantly affect my rate. They only perform soft pulls once every three years where I live, so they otherwise wouldn't have caught the changes for another 2 years. 

 

The process will take then 24-48 hours to get back to me with the new rate, but it sounds as if I'm in for substantial changes. The Analyst was incredibly helpful, though it seemed as if this was maybe the first time they'd ever received a call like mine. Just a reminder to everyone out there who has been hard at work building up their scores, it affects nearly everything -- even your insurance rates. Be sure to take advantage! I'll update when I receive word on my savings!

14 REPLIES 14
Valued Contributor

Re: Improved FICO Scores = Lower Insurance Rates!


@mkpush wrote:

After having raised my credit score from the low 500s to 700 within the past 9 months, I contacted my auto-insurance provider to see if it would affect my rate. Whenever information is corrected on your CR, you legally have 6mos to have new CRs sent to anyone who may have pulled it (12mos in some states & two years for employers). I informed Progressive of these changes and they said that while they didn't factor actual credit scores, the negative items that had been deleted would significantly affect my rate. They only perform soft pulls once every three years where I live, so they otherwise wouldn't have caught the changes for another 2 years. 

 

The process will take then 24-48 hours to get back to me with the new rate, but it sounds as if I'm in for substantial changes. The Analyst was incredibly helpful, though it seemed as if this was maybe the first time they'd ever received a call like mine. Just a reminder to everyone out there who has been hard at work building up their scores, it affects nearly everything -- even your insurance rates. Be sure to take advantage! I'll update when I receive word on my savings!


Very nice! Just as a side note, not all states use FICO scores for certain insurance rates, such those that require you to have auto insurance. My state in NJ is an example.

Message 2 of 15
Mega Contributor

Re: Improved FICO Scores = Lower Insurance Rates!


@daybreakgonesXe wrote:

@mkpush wrote:

After having raised my credit score from the low 500s to 700 within the past 9 months, I contacted my auto-insurance provider to see if it would affect my rate. Whenever information is corrected on your CR, you legally have 6mos to have new CRs sent to anyone who may have pulled it (12mos in some states & two years for employers). I informed Progressive of these changes and they said that while they didn't factor actual credit scores, the negative items that had been deleted would significantly affect my rate. They only perform soft pulls once every three years where I live, so they otherwise wouldn't have caught the changes for another 2 years. 

 

The process will take then 24-48 hours to get back to me with the new rate, but it sounds as if I'm in for substantial changes. The Analyst was incredibly helpful, though it seemed as if this was maybe the first time they'd ever received a call like mine. Just a reminder to everyone out there who has been hard at work building up their scores, it affects nearly everything -- even your insurance rates. Be sure to take advantage! I'll update when I receive word on my savings!


Very nice! Just as a side note, not all states use FICO scores for certain insurance rates, such those that require you to have auto insurance. My state in NJ is an example.


Only CA, MA and HI ban the use of credit factors in auto insurance rates    So is the NJ restriction on minimally-required insurance or

something?

Message 3 of 15
Established Contributor

Re: Improved FICO Scores = Lower Insurance Rates!

I can totally relate to this. Last year I was turned down for insurance because my score was less than 650. 

Message 4 of 15
Senior Contributor

Re: Improved FICO Scores = Lower Insurance Rates!


@mkpush wrote:

After having raised my credit score from the low 500s to 700 within the past 9 months, I contacted my auto-insurance provider to see if it would affect my rate. Whenever information is corrected on your CR, you legally have 6mos to have new CRs sent to anyone who may have pulled it (12mos in some states & two years for employers). I informed Progressive of these changes and they said that while they didn't factor actual credit scores, the negative items that had been deleted would significantly affect my rate. They only perform soft pulls once every three years where I live, so they otherwise wouldn't have caught the changes for another 2 years. 

 

The process will take then 24-48 hours to get back to me with the new rate, but it sounds as if I'm in for substantial changes. The Analyst was incredibly helpful, though it seemed as if this was maybe the first time they'd ever received a call like mine. Just a reminder to everyone out there who has been hard at work building up their scores, it affects nearly everything -- even your insurance rates. Be sure to take advantage! I'll update when I receive word on my savings!


Just to clarify -  Your standard Fico scores are not the scores looked at by insurance companies when setting insurance premiums.

 

The scores typically considered as an element in setting insurance premiums are insurance based credit scores (CBIS). The primary provider of this score is LexisNexis. Transunion and Fico also offer CBIS but, LN is dominant. More often than not CBIS scores will go up when Fico 08 scores increase. Both standard Fico 08 and CBIS look at many of the major scoring factors in the same way.

 

However,  CBIS looks at many other factors that are not considered in Fico 08. Thus, it is possible for Fico 08 to increase while LN CBIS goes down. Some other threads do into this in some detail

Fico 8: .......EQ 850 TU 850 EX 850
Fico 9: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
VS 3.0:...... EQ 835 TU 835 EX 835
Fico 8 BC:. EQ 892 TU 900 EX 900
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 5 of 15
Frequent Contributor

Re: Improved FICO Scores = Lower Insurance Rates!

My score recently went up to 702. I recently got a new insurance company and the rate was pretty low. Lower then what I had. I was happy.

Message 6 of 15
Contributor

Re: Improved FICO Scores = Lower Insurance Rates!

I didn't know that actually. I can understand the argument to FICO score relevance on both sides though. Thanks for sharing!


Very nice! Just as a side note, not all states use FICO scores for certain insurance rates, such those that require you to have auto insurance. My state in NJ is an example.


 

Message 7 of 15
Contributor

Re: Improved FICO Scores = Lower Insurance Rates!

I've experienced that too. State Farm came back so outrageously high it was obvious they didn't want me as a customer. Only Progressive came back with a reasonable rate.

Message 8 of 15
Contributor

Re: Improved FICO Scores = Lower Insurance Rates!

Thanks for clarifying this. The Analyst in fact told me that credit scores are never considered, just the substantive material of the credit reports. In my case, four collections accounts and two 30-day lates were removed, so she made a point to tell me that it would affect the rate without question. She didn't mention LN, but I've since researched and found that there are no less than dozens of credit bureaus in the US, most which specialize in a very specific category: i.e., auto, medical, insurance, etc. 

 


Just to clarify -  Your standard Fico scores are not the scores looked at by insurance companies when setting insurance premiums.

 

The scores typically considered as an element in setting insurance premiums are insurance based credit scores (CBIS). The primary provider of this score is LexisNexis. Transunion and Fico also offer CBIS but, LN is dominant. More often than not CBIS scores will go up when Fico 08 scores increase. Both standard Fico 08 and CBIS look at many of the major scoring factors in the same way.

 

However,  CBIS looks at many other factors that are not considered in Fico 08. Thus, it is possible for Fico 08 to increase while LN CBIS goes down. Some other threads do into this in some detail


 

Message 9 of 15
Contributor

Re: Improved FICO Scores = Lower Insurance Rates!

@Btw, @Thomas_Thumb, congrats on the 850s! Any advice? I've read some perspectives that say the only way to a perfect score (besides what is obvious) is to have all four different types of credit. i.e. Installment, Revolving, Mortgage & Consumer Finance (which I assume is a personal loan or a personal line of credit?) Do you have any perspective on this?


@Thomas_Thumb wrote:
Just to clarify -  Your standard Fico scores are not the scores looked at by insurance companies when setting insurance premiums.

The scores typically considered as an element in setting insurance premiums are insurance based credit scores (CBIS). The primary provider of this score is LexisNexis. Transunion and Fico also offer CBIS but, LN is dominant. More often than not CBIS scores will go up when Fico 08 scores increase. Both standard Fico 08 and CBIS look at many of the major scoring factors in the same way.

However,  CBIS looks at many other factors that are not considered in Fico 08. Thus, it is possible for Fico 08 to increase while LN CBIS goes down. Some other threads do into this in some detail


 

Message 10 of 15
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