You consider yourself one of the safest drivers on the road. You see the speed limit, always using the turn signal even when changing lanes, and the only tickets you got from parking meters are expired. You have the cleanest driving records, so one might think that you will be the top candidate to lower auto insurance rates, especially less than that bastard who passed you this morning in the school district, right?
Wrong, or at least not necessarily.
If your credit report has some flaws, it is likely that you may not get the lowest auto insurance rates, despite the fact that your driving record is very clean. Thanks to the recent Supreme Court ruling, the car insurance company does not have to inform you that you are not getting the best rates. As absurd as it sounds, the Supreme Court recently overturned the circuit court ruling stating that the FCRA (Fair Credit Reporting Act) law requires insurance companies to inform customers whenever their credit rating prevents them from obtaining the best available auto insurance rate available.
Auto insurance companies argue that a customer’s credit rating is just one of many criteria that they use to determine customer car insurance rates. They said that if the decision were in effect, they would have required that millions of notifications be sent to clients to avoid class action.
Over the past ten years or so, most auto insurance companies have used a customer’s credit rating when determining vehicle insurance rates for a customer. They claim that many studies have indicated that clients with bad credit are more likely to make claims.
Auto insurance companies claim that the credit report is a “strong indicator of risk”, after all, auto insurance rates are all about risk. They also claim that a person with bad credit tends to be more irresponsible, as he has demonstrated irresponsibility with his credit and is also likely to be irresponsible with his driving habits.
Consumer groups clearly differ completely and say this assumption on the part of auto insurance companies is a “troublesome moral premise”. Many people have bad credit because of divorce, layoffs, and serious illness, and there is absolutely no reflection on their level of responsibility.
Additionally, notorious credit reports are known for errors. Studies have shown that a high percentage of consumer credit reports contain errors. Credit bureaus claim that they only report news and bear almost no responsibility for the accuracy of the information reported. The sad consequence of this fact is that the vast majority of consumers do not regularly review their credit reports, and if they do, they will have no idea how to correct inaccurate data. For information on how to remove inaccurate data from your credit report so that your credit score is higher, you may want to visit raising your credit score for more information.