How will I know if my credit history has affected my insurance purchase?
The FCRA requires insurance companies to notify consumers if an adverse action is taken because of their credit information. FCRA defines adverse action to include denying or canceling coverage, increasing premiums, or changing the terms, coverage, or amount of coverage in a way that harms the consumer. If an insurer takes an adverse action due to your credit history it also must notify you of the name of the national credit bureau that supplied the information.

Examples of an adverse action include:

• Canceling, denying or not renewing coverage
• Giving the consumer a limited coverage form
• Limiting benefits, such as eligibility for dividends
• Issuing coverage other than for what was applied
• Not giving the consumer the best rate
• Not giving the consumer the best discount
• Adding a premium surcharge

How can I review my credit report?

Monitoring your credit report is important because many decisions now are based on how your finances are managed. It is a good idea to obtain a copy of your credit report once a year and review it for any errors. Consumers now can receive one free copy of their credit report every 12 months from each of the three national credit bureaus. To receive your free credit report, visit www.annualcreditreport.com. Or contact the three credit bureaus directly:

• Equifax: www.credit.equifax.com or 800-685-1111
• Experian: www.experian.com or 888-397-3742
• Trans Union: www.transuion.com or 800-888-4213

It is important to remember that your credit report is not the same thing as your credit score. To obtain your credit score, you will have to buy it from one of the credit bureaus. However, it may not be the same credit score that the insurer used to make its decision.

How can I improve my credit?

To improve your credit, it is helpful to review your credit report for any false information and outdated items. Create a plan that will improve your credit over time. Ideas to help improve your credit history are:

• Pay bills on time every month
• Pay at least the minimum balance due
• If you can’t make a  payment, contact the creditor
• Work to reduce the amount you owe, especially on revolving debt such as credit cards
• Limit the number of new credit accounts

Your insurance agent or company should be able to identify for you up to four factors that impact your insurance credit score the most. It may take up to seven years for an accurate, negative report to be removed from your credit report. You must notify each of the credit bureaus of any errors you find on the report. The credit bureaus do not share information. The Federal Trade Commission has excellent information regarding a consumer’s rights and use of credit. This information can be found at www.ftc.gov or by calling 877-382-4357.

Important points to remember:

• There is a good chance your current auto and/or homeowners insurance company, or a prospective insurer, will review your credit history.
• Verify whether your auto and/or homeowners insurance company uses credit scores, and ask how that information impacts your insurance premium.
• Once a year, obtain and review a copy of your credit report from each of the three credit bureaus.
• Report any errors to your insurer and each credit bureau.
• Work toward improving your credit.

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