Wednesday, August 24, 2011

Insurance Scores vs Credit Scores...What's the Difference?

You know about your credit score, right? That number that credit card companies, mortgage banks -- even your landlord -- uses before deciding whether your a good or bad financial risk. Well guess what? Insurance companies take a peek at your insurance score for exactly the same reason -- to see if they want to sell you car insurance or homeowners insurance, and to figure out how much they're going to charge you.

You insurance score is based on the same information that's in your credit report, but with different weights and calculations because, well, insurance and credit are two different things, after all. As with credit scores, FICO is the 800-pound gorilla of the insurance score industry.

Are insurance scores fair? The FTC thinks they do a pretty good job...sort of!

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