Managing your credit — borrowing money and paying your bills — is part of everyday life. The use of credit information by the financial services industry has long been a widespread practice, and credit has now become a key tool for insurers.
Home and auto insurers use credit information to produce an “insurance score,” which helps them to more accurately assess an applicant. Research has shown a strong correlation between credit history and the likelihood of loss in both auto and homeowners insurance. Insurance scores, then, provide an objective, accurate and consistent tool that many insurance carriers, including Erie Insurance, use in conjunction with other information to better anticipate claims.
But insurance scores are only one factor in the underwriting decision. Insurers also consider years of driving experience, previous accidents and violations, type of car and home construction type for example.