Facts & Fallacies
Fallacy: My score determines whether or not I get insurance.
Fact: Insurers use a number of factors to make underwriting decisions,
including your Fair Isaac insurance score. Insurers look at information such as past claims history, your
driving record (for auto insurance), and the value of your property/auto. Based on their perception of this
information, as well as their specific underwriting guidelines, insurers may extend insurance to you even
though your score is low, or decline your request for insurance although your score is high.
Scores change gradually as you change the way you handle your credit responsibilities.
Fallacy: A poor score will haunt me forever.
Fact: Just the opposite is true. A Fair Isaac insurance score is a “snapshot”
of your insurance risk at a particular point in time. It changes as new information is added to your credit
bureau files. Scores change gradually as you change the way you handle your credit responsibilities. For
example, past credit problems impact your score less as time passes. Insurers typically request a current
score when you submit a new application, so they have the most recent information available. Therefore by
taking the time to improve your score, you can qualify for more favorable insurance rates.
Fallacy: Insurance scoring is unfair to minorities.
Fact: Fair Isaac insurance scores do not consider ethnic group, religion,
gender, marital status, nationality, age, income or address. Only credit-related information is included.
Scoring has proven to be an accurate and consistent measure of insurance risk for all people who have
some credit history. In other words, at a given score, non-minority and minority applicants present an
equal level of insurance risk (i.e., an equal likelihood of future claims). For more complete information, you can
learn more about what’s in your score and
what’s not in your score.
Fallacy: Insurance scoring infringes on my privacy.
Fact: Insurance companies have used consumer credit information to assist
in their underwriting decisions since the FCRA was enacted in 1970. An insurance score is simply a numeric
summary of that credit information. In fact, by using insurance scoring, some insurance companies don’t
need to ask for as much information on their application forms, and most no longer need to specifically review
each consumer’s credit report.
Fallacy: My insurance score will be hurt if I contact several insurance
companies who each access my credit report.
Fact: Insurance company requests, or “inquiries,” are not considered by Fair
Isaac insurance scores (or by Fair Isaac credit scores, for that matter) and will not affect your score.