When you are beginning your search to find Arizona Auto Insurance Quotes you will likely need a lot of information in order to provide the insurance company with the appropriate materials to calculate an accurate quote. One of the key items you will need is information regarding your credit history, this is one of the most important parts to calculating a quote. They will want as much information as possible. It would be of benefit to you to understand exactly why it is so important before you begin your search.
Does an insurance company require permission to look at my credit history?
Unfortunately no they do not. Under the federal fair credit reporting act (FCRA) insurance companies are able to gain access to your credit information without your permission. However, they do have to inform you if they are going to do this and you will be given the opportunity to review their findings and make any corrections to inaccurate information.
Why is credit information so important?
Insurance companies believe that there is a significant statistical link between the credit history of a policy holder and the claims that may be filed under the policy. Therefore, insurance companies hold the view that the more favorable the credit history of the applicant is the less likely they are to make an insurance related claim, and also any claims they do make will be far less severe.
What is an insurance score?
Some companies will go further than purely analyzing the credit data available to them and will use many items of information in order to determine an insurance score. They will then use the insurance score to work out whether the applicant is a viable risk and will also calculate the premium rate payment. Depending on the company, different factors may carry more weight than others, however in general there are some standard factors that will be taken into consideration.
- Public Records – including information on any evidence of bankruptcy or foreclosures.
- Payment History – E.g. any late payments on bills/ mortgage repayments, rent and credit cards as well as the frequency and length of any late payments.
- Length of credit history – The period of time in which the applicant has been in the credit system.
- Inquiries for credit – This refers to the amount of times the applicant has applied for new accounts including mortgage loans, credit cards and utility accounts.