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Esteemed Contributor
Posts: 5,511
Registered: ‎03-09-2010

Esmerelda, my girl!! {#emotions_dlg.thumbup}

Ladies, she is the absolute best when it comes to investing & finance.

MI does use a FICO score as part of your rate calculation. Not all states do.

My employer pulled my credit and does so from time to time. Only looking for BK and defaulted major debts including IRS. There are specific criteria used and you are told up front. There is no back door surprise.

They do not use a FICO score.

Esteemed Contributor
Posts: 6,775
Registered: ‎03-13-2010

I don't see how it affects job hiring. My GD was offered two jobs at the major medical facility here. She is in her early 20's with NO credit Score. Has never owned anything & has no credit cards ever. She even has a small outstanding medical bill. She started work the first of December.

Esteemed Contributor
Posts: 6,221
Registered: ‎08-09-2012
On 1/5/2015 esmeraldagooch said:

What is a Credit-Based Insurance Score?

A credit score is a snapshot of your credit at one point in time. Credit-based insurance scores were introduced in the early 1990s and use certain elements of a person's credit history to predict how likely consumer is to have an insurance loss, as research shows there is a correlation between credit characteristics (credit-based insurance scores) and insurance losses. According to FICO, a major company that generates credit-based insurance scores, approximately 95% of auto insurers and 85% of homeowners insurers use credit-based insurance scores in states where it is a legally allowed underwriting or risk classification factor.

How does it differ from your regular credit score?

A regular credit score looks at many different factors to determine how likely you are to repay a loan or a line of credit. A credit-based insurance score looks at some, but not all, factors in your credit history to determine how you are likely to manage your risk exposure.

What kinds of insurance can my credit affect?

Not all states allow the use of credit-based scores in determining premiums. Some states only allow it as a factor for property insurance like auto and homeowners insurance. Other states allow it to be used with any type of insurance. Check with your state insurance department to find out what the law in your state allows.

How can an insurance company use your credit-based insurance scores?

An insurance company can only use your credit-based insurance score as one factor in its underwriting process. It will be considered with several other factors that vary by insurance type. For example, with auto insurance other factors could be your zip code; the age of the operators; the make, model and age of the car; and even the miles you drive annually. You can ask your insurance company if a credit-based insurance score was used to underwrite and rate your policy and which risk category you were placed in after you receive a quote.

What kind of information goes in to my credit-based insurance scores?

There are several different companies that create credit-based insurance score reports for insurers to use. FICO looks at five general areas it believes will best determine how you manage risk. This is the breakdown of what it considers and how much the information generally weighs in figuring your credit-based insurance score:

  • Payment History (40%) – How well you have made payments on your outstanding debt in the past
  • Outstanding Debt (30%) – How much debt you currently have
  • Credit History Length (15%) – How long you have had a line of credit
  • Pursuit of New Credit (10%) – If you have applied for new lines of credit recently
  • Credit Mix (5%) – The types of credit you have (credit card, mortgage, auto loans, etc.)

http://www.naic.org/documents/consumer_alert_credit_based_insurance_scores.htm

Thank you for confirming my previous comments! {#emotions_dlg.thumbup}

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Respected Contributor
Posts: 3,597
Registered: ‎03-10-2010
On 1/5/2015 straitgirl said:

I don't see how it affects job hiring. My GD was offered two jobs at the major medical facility here. She is in her early 20's with NO credit Score. Has never owned anything & has no credit cards ever. She even has a small outstanding medical bill. She started work the first of December.

Perhaps what they considered was something that was not on the report. No late payments, multiple cc's with outstanding balances, new car loan.

Honored Contributor
Posts: 12,997
Registered: ‎03-25-2012

Of course if one pays everything with cash and uses no credit at all, there is no FICO score, and that is not good either.

Formerly Ford1224
We must always take sides. Neutrality helps the oppressor, never the victim. Silence encourages the tormentor, never the tormented. Elie Wiesel 1986
Honored Contributor
Posts: 25,929
Registered: ‎03-09-2010
On 1/6/2015 esmeraldagooch said:
On 1/5/2015 straitgirl said:

I don't see how it affects job hiring. My GD was offered two jobs at the major medical facility here. She is in her early 20's with NO credit Score. Has never owned anything & has no credit cards ever. She even has a small outstanding medical bill. She started work the first of December.

Perhaps what they considered was something that was not on the report. No late payments, multiple cc's with outstanding balances, new car loan.

I think what they look at is the picture your credit history paints of you , in general. Are you trustworthy and dependable or a deadbeat ! If you are thinking of hiring a very young person then certainly it is not unexpected they wouldn't have any credit history.