Credit Should Not be a Factor

Many people don’t realize that when they go to find out about their auto insurance options that the auto insurance companies are going to be checking their credit. It does not seem that the two should go together. However, how much you pay each month is determined by the amount of debt that you have and how that debt is paid.

Many consumers don’t think that they should be linked together, but the auto insurance companies say that the amount of debt, and their credit score has a direct correlation with the way that you will pay their bills. They say that for them to take a risk on someone without good credit means that they have to charge them more just in case they pay less or default on their auto insurance policy.

However, because of the number of people that have a problem with their auto insurance being dependent on their credit score – especially in today’s economy – they have started complaining to their elected officials to do something about it. In Connecticut they agree.

Auto insurance companies in Connecticut are now being limited to what they are allowed to do in as far as using credit reports to decide how much they pay for their policies. A bill that has been approved by a legislative panel within the state does not go with a total ban of using them like many had asked for, but it does limit their usage of the information. The ban now limits them from using the information from someone who has been “adversely impacted by an extraordinary life circumstance” within the last three years.




 

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