Time for the Government to put an end to FICO

[llecs]

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@MidnightVoice wrote:

This thread is wonderful      Reminds me of the good old Dave Ramsey days.

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Speaking of that...DR is on in most major markets from 2-5pm (Eastern).

[Lel]

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@MidnightVoice wrote:

This thread is wonderful      Reminds me of the good old Dave Ramsey days.

And it is my belief that most major auto insurers use FICO for rates.  There is some argument about the studies that have been done about the relationship between FICO score and claims (technical on the merits of the statistical methodolgy).  But some studies have shown the correlation

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Here's a pretty generic article that notes the association between credit scores/credit reports and auto insurance rates.  I figured I could help contribute to the TJ, since I haven't weighed in on this thread thus far and I'm feeling a little left out.

5 Innocent Ways to Drive Up Car Insurance

[fused]

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@Lel wrote:

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@MidnightVoice wrote:

This thread is wonderful      Reminds me of the good old Dave Ramsey days.

And it is my belief that most major auto insurers use FICO for rates.  There is some argument about the studies that have been done about the relationship between FICO score and claims (technical on the merits of the statistical methodolgy).  But some studies have shown the correlation

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Here's a pretty generic article that notes the association between credit scores/credit reports and auto insurance rates.  I figured I could help contribute to the TJ, since I haven't weighed in on this thread thus far and I'm feeling a little left out.

5 Innocent Ways to Drive Up Car Insurance

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Welcome to the party, guy!!!!!!!

[Anonymous]

Sorry, any of you in your late 60's and early 70's. I didn't mean to imply that your age group led to the particular personality traits that are displayed by the OP, just to note that, based on his comments, I guessed his age to be that. Owns his own home, apparently does not travel, because credit cards are necessary to reserve hotel rooms, rent cars, etc. In point of fact, many of his ilk are much younger; the stereotypical tough-talking jerk on internet fora who is an overweight, pimply 30 year old, working at the drive-through and living in his parent's basement.

I, personally, am joining the 60 club next year. But the day I live to annoy people, somebody pack me up and take away my computer, please?

[vanillabean]

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@Anonymous wrote:

Yes they are reviewed every 6 months on your renewal offer and adjusted accordingly. It is only a soft pull so it doesnt affect scores or anything. I am not sure of the rate tiers. They arent wiling to share that info that I know of. I just know I am not there yet.

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Thanks. I checked my software inquiries for all three CRAs and surprisingly could not find any that match my car insurance company checking up on me. I'll call my local agent to make sure. The next bill should be coming up fairly soon.

Also, someone talked about the potential correlation between your credit score and your driving. There may be a partial overlap at best, I think. Certainly it's much better to check a person's driving record, if that's stored in a central register. Sort of a person's driving score.

A not overlapping factor in the correlation could be how well you play one game and not the other. As for driving itself, there's a concept called spatial ability. A theory that points to genes in a such a way that overall women, less than men, are at ease parallel parking.

Let me bring up another example that might be as much of an emotional landmine as charging airline tickets based on your personal weight and volume. For a number of posts over say 100, is there a correlation between your credit score and how often you have posted to myFICO forums?

I have not reached a conclusion (and am not sure it matters), but someone probably knows.

[Anonymous]

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@Anonymous wrote:

Sorry, any of you in your late 60's and early 70's. I didn't mean to imply that your age group led to the particular personality traits that are displayed by the OP, just to note that, based on his comments, I guessed his age to be that. Owns his own home, apparently does not travel, because credit cards are necessary to reserve hotel rooms, rent cars, etc. In point of fact, many of his ilk are much younger; the stereotypical tough-talking jerk on internet fora who is an overweight, pimply 30 year old, working at the drive-through and living in his parent's basement.

I, personally, am joining the 60 club next year. But the day I live to annoy people, somebody pack me up and take away my computer, please?

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No I am not IM my 70's. Im 45, Yes I own my home (and 2 others for rentals). Im married (19 years) with one daughter still in school, we both work and are quite happy with our lives. Yes Im a university Graduate (Business graduate, Psychology minor). I pleasure travel quite much, I won't fly anymore as the treat you like human garbage. Many hotels will accept a check card or just good ol cash. The ones that don't I don't do business with. As I said before I do keep 1 credit card, I charge 1 tank of gas on it every month and just pay it off. Im sure it costs those fools more to bill me then any profit they will generate from me. And from all the credit offers I throw in the "firestarter" box its no wonder they nail those who can't see the light with so many fees and interest...just to pay for the Lobbyists, Junk mail, and the PR firms.

I let you rant on because I really don't understand your obvious anger and personal attack on me. I came on here criticizing a BUSINESS ENTITY not any people. And certainly not you. Why you would be so upset about somebody attack the escalating consumer abuse FICO and the banking industry is causing...well it just defies logic, but hey....if it floats you boat to try and position me as a "hate object" have at it...I don't care.

[Anonymous]

There is no correlation between FIFRAUD scores and driving. Its why its time to take FIFRAUD to the woodshed. Its being used as a discrimination tool. A polished so called "scientific justification" for sticking it to the poor, those with financial problems and the just plain not to smart.

Why, because, as always these groups of people just do not have the economic power or means to fight back against a corporation....they are an easy mark for parasitical corporations to bleed dry and FIFRAUD is one of their tools of the trade.

How do you take down tyranny?...from within....by removing the tools they use to suppress and dominate.... FIFRAUD is one tool that has to go. And there is a growing consumer interest in doing just that!

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

Sorry, any of you in your late 60's and early 70's. I didn't mean to imply that your age group led to the particular personality traits that are displayed by the OP, just to note that, based on his comments, I guessed his age to be that. Owns his own home, apparently does not travel, because credit cards are necessary to reserve hotel rooms, rent cars, etc. In point of fact, many of his ilk are much younger; the stereotypical tough-talking jerk on internet fora who is an overweight, pimply 30 year old, working at the drive-through and living in his parent's basement.

I, personally, am joining the 60 club next year. But the day I live to annoy people, somebody pack me up and take away my computer, please?

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No I am not IM my 70's. Im 45, Yes I own my home (and 2 others for rentals). Im married (19 years) with one daughter still in school, we both work and are quite happy with our lives. Yes Im a university Graduate (Business graduate, Psychology minor). I pleasure travel quite much, I won't fly anymore as the treat you like human garbage. Many hotels will accept a check card or just good ol cash. The ones that don't I don't do business with. As I said before I do keep 1 credit card, I charge 1 tank of gas on it every month and just pay it off. Im sure it costs those fools more to bill me then any profit they will generate from me. And from all the credit offers I throw in the "firestarter" box its no wonder they nail those who can't see the light with so many fees and interest...just to pay for the Lobbyists, Junk mail, and the PR firms.

I let you rant on because I really don't understand your obvious anger and personal attack on me. I came on here criticizing a BUSINESS ENTITY not any people. And certainly not you. Why you would be so upset about somebody attack the escalating consumer abuse FICO and the banking industry is causing...well it just defies logic, but hey....if it floats you boat to try and position me as a "hate object" have at it...I don't care.

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You LET her rant. Since when do you decide who rants or not. 

You did make remarks and criticize others who understand the necessity of FICO and try to help others when they did not succumb to your rants.

[MidnightVoice]

http://www.lendersindex.com/credit-score/watch-out-credit-score-determining-auto-insurance-cost/

Many recent studies confirm the strong correlation between credit history and loss in both auto and homeowners insurance. Neither insurers nor the credit-scoring companies that discovered the relationship know what causes it. It is believed that generally people with a pattern of irresponsible financial behavior and poor credit history have a much greater chance of being in an accident or filing a claim. But the other studies, such as the Monaghan study, which reviewed those long-standing inferences, say that links between responsible financial management and future expected losses are “unsupported.”

http://www.progressive.com/shop/EPIC_CreditScores.pdf

The Relationship of Credit-Based Insurance Scores to Private Passenger Automobile Insurance Loss Propensity

An Actuarial Study

by

EPIC Actuaries, LLC

[MidnightVoice]

http://www.ic2.utexas.edu/publications/bbr_creditstudy.pdf

A Statistical Analysis of the Relationship Between Credit History and Insurance Losses

Executive Summary

At the request of Lt. Governor Bill Ratliff in 2002, the Bureau of Business Research (BBR) examined the relationship between credit history and insurance losses in automobile insurance.  With the assistance of the leading automobile insurers in Texas, the BBR research team constructed a database of automobile insurance policies from the first quarter of 1998 that included the following 12 months’ premium and loss history. Choicepoint, a commercial firm that provides underwriting information products for the U. S. property and casualty personal lines insurance market, then matched the named insured on the policy with his or her credit history and supplied a “credit score” using an insurance credit scoring methodology it markets to automobile insurers. This credit score and its relationship with prospective losses for the policy were then examined.

Using logistic and multiple regression analyses, the research team tested whether the credit score for the named insured on a policy was significantly related to incurred losses for that policy. It was determined that there was a significant relationship. In general, lower credit scores were associated with larger incurred losses. Next, logistic and multiple regression analyses examined whether the revealed relationship between credit score and incurred losses was explainable by existing underwriting variables, or whether the credit score added new information about losses not contained in the existing underwriting variables. It was determined that credit score did yield new information not contained in the existing underwriting variables.

What the study does not attempt to explain is why credit scoring adds significantly to the insurer’s ability to predict insurance losses. In other words, causality was not investigated. In addition, the research team did not examine such variables such as race, ethnicity, and income in the study, and therefore this report does not speculate about the possible effects that credit scoring may have in raising or lowering premiums for specific groups of people. Such an assessment would require a different study and different data.