What a pile of %^&*! Where do you get such bull? Garbage letters from so called insurance professionals make me so angry. Are there predudiced people in insurance, of course. Just like in society in general. As far as I can tell they don’t run insurance companies. Keep living in the old days old timer.
Have to disagree DWT, it has strong correlations to race/ethnic background. Earning capacity and the discipline to live within your means has credible links to some ethnic groups. Nonetheless, that doesn’t make it discriminatory. Why is it that the race card is only played when one particular ethnic group doesn’t like something? I keep waiting for an American-American to holler discrimination. Hasn’t happened thus far but the country is only a couple hundred years old.
Poor people don’t get credit cards.When they do the Institutions charge them 3-4 times the interest rate as someone who has money.
Again Corporations favorable to the wealthy. They get free points,flights,gifts etc. while the poor guy tries to establish their credit to try and have a piece of the AMERICAN DREAM!
Maybe You should re-read the article.
Maybe your on of the one’s that’s been handed money from generation to generation. Race is mentioned in the article. Read more than the first and last paragraph!
The article specifically is on CBIS (look it up moron), not credit nor FICO score. Edu-ma-cate yourself before spouting off in defense of the “defens-less” as there is a distinct difference. I think there is a distinct dis-service for the crusaders looking for the next big witch hunt.
this discussion has come up many times in the last few months. and it seems to be a all or nothing argument.
I think people are under the assumption that if they have bad credit then instantly their rates will increase…but that isn’t necessarily so, is it? if you are indeed looking at other data (claims history, insurance history, DUI’s, speeding tickets, being dropped from a previous carrier, etc…) then having a low credit score would of course be one more reason (or mathematical reason) to increase someone’s rates. BUT, if somone has great driving record, good insurance history, premiums paid on time, etc…and bad credit, then that doesn’t necessarily mean it would result in an outrageous premium hike, but they may see an increase. correct? credit scoring is just another tool used in the equation, right?
Word, yo.
It honestly depends upon your carrier’s level of pricing sophistication. For the most part, credit information (in any form like a score) will not be the only factor in determining your premiums. It will more than likely be combined with relevant customer experieince data with the carrier (or previous claims, payments, etc.)
Yes, you are correct, scoring is just a part of the underwriting/rating process. One particular company that I work closely with admitted (to an agent board) that scoring only accounted for 18% of the entire rating matrix. They may have changed since but with the ever-looming Congressional backlash, I doubt they increased the percentage.
I continue to be amazed by the number of negative knee-jerk reactions to credit scoring without any substantive evidentiary support. Credit scores contain no information about race or income levels. It is simply the result of broad-based comparison of claim experience to credit scores that revealed a STATISTICAL CORRELATION between lower scores and higher claims experience. A statistical correlation is simply a mathmatical outcome, it does not identify a cause and effect (Studies show that when it is raining 98% of the people with umbrellas will open them. If 98% of the people open their umbrellas, it will not rain–nevertheless, statistical probability is that when 98% of umbrellas are open, it is safe to bet it’s raining!) Why do companies like credit scoring? A couple of reasons. First, it is the most accurate statistical correlation available, i.e. better than age, driving record, marital status etc. (this is a relative thing–Let’s say age has an 8% accuracy a s predictor and credit scoring 12%, that is a 50% improvement, good by any standard.) Second, it is fast and convenient. With a computer and your SSN, a company can generate a quote on line in minutes, if not seconds. This greatly facilitates the sales process particularly on the internetsales and agent sales. This convenience should result in more competitive rates by lowering sales costs and increasing predictability.
Don’t like credit scoring? Don’t just play the race card. If it is half as bad as suggested, there should be plenty of empirical evidence with with which to back up your claim of discrimination. Go find it and you will get a lot more respect for your position than from whining
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What a pile of %^&*! Where do you get such bull? Garbage letters from so called insurance professionals make me so angry. Are there predudiced people in insurance, of course. Just like in society in general. As far as I can tell they don’t run insurance companies. Keep living in the old days old timer.
Have to disagree DWT, it has strong correlations to race/ethnic background. Earning capacity and the discipline to live within your means has credible links to some ethnic groups. Nonetheless, that doesn’t make it discriminatory. Why is it that the race card is only played when one particular ethnic group doesn’t like something? I keep waiting for an American-American to holler discrimination. Hasn’t happened thus far but the country is only a couple hundred years old.
Poor people don’t get credit cards.When they do the Institutions charge them 3-4 times the interest rate as someone who has money.
Again Corporations favorable to the wealthy. They get free points,flights,gifts etc. while the poor guy tries to establish their credit to try and have a piece of the AMERICAN DREAM!
Greed I say!
The rich keep the rich rich!
Maybe You should re-read the article.
Maybe your on of the one’s that’s been handed money from generation to generation. Race is mentioned in the article. Read more than the first and last paragraph!
The article specifically is on CBIS (look it up moron), not credit nor FICO score. Edu-ma-cate yourself before spouting off in defense of the “defens-less” as there is a distinct difference. I think there is a distinct dis-service for the crusaders looking for the next big witch hunt.
this discussion has come up many times in the last few months. and it seems to be a all or nothing argument.
I think people are under the assumption that if they have bad credit then instantly their rates will increase…but that isn’t necessarily so, is it? if you are indeed looking at other data (claims history, insurance history, DUI’s, speeding tickets, being dropped from a previous carrier, etc…) then having a low credit score would of course be one more reason (or mathematical reason) to increase someone’s rates. BUT, if somone has great driving record, good insurance history, premiums paid on time, etc…and bad credit, then that doesn’t necessarily mean it would result in an outrageous premium hike, but they may see an increase. correct? credit scoring is just another tool used in the equation, right?
(i’m genuinely asking.)
Word, yo.
It honestly depends upon your carrier’s level of pricing sophistication. For the most part, credit information (in any form like a score) will not be the only factor in determining your premiums. It will more than likely be combined with relevant customer experieince data with the carrier (or previous claims, payments, etc.)
Yes, you are correct, scoring is just a part of the underwriting/rating process. One particular company that I work closely with admitted (to an agent board) that scoring only accounted for 18% of the entire rating matrix. They may have changed since but with the ever-looming Congressional backlash, I doubt they increased the percentage.
I continue to be amazed by the number of negative knee-jerk reactions to credit scoring without any substantive evidentiary support. Credit scores contain no information about race or income levels. It is simply the result of broad-based comparison of claim experience to credit scores that revealed a STATISTICAL CORRELATION between lower scores and higher claims experience. A statistical correlation is simply a mathmatical outcome, it does not identify a cause and effect (Studies show that when it is raining 98% of the people with umbrellas will open them. If 98% of the people open their umbrellas, it will not rain–nevertheless, statistical probability is that when 98% of umbrellas are open, it is safe to bet it’s raining!) Why do companies like credit scoring? A couple of reasons. First, it is the most accurate statistical correlation available, i.e. better than age, driving record, marital status etc. (this is a relative thing–Let’s say age has an 8% accuracy a s predictor and credit scoring 12%, that is a 50% improvement, good by any standard.) Second, it is fast and convenient. With a computer and your SSN, a company can generate a quote on line in minutes, if not seconds. This greatly facilitates the sales process particularly on the internetsales and agent sales. This convenience should result in more competitive rates by lowering sales costs and increasing predictability.
Don’t like credit scoring? Don’t just play the race card. If it is half as bad as suggested, there should be plenty of empirical evidence with with which to back up your claim of discrimination. Go find it and you will get a lot more respect for your position than from whining