Released: May 30, 2007

How insurance scores affect premiums

Source: Kimberly Lankford, Kiplinger's Personal Finance

How is the credit score that insurance companies use when setting premiums different from the one that lenders use when determining your rates on a loan?

The version insurers use is slightly different from the one that lenders use. Both types of scores are based on information from your credit report, but insurers weigh the items differently. For example, insurers look a lot more closely at how you’ve managed credit over time rather than how much credit you’ve applied for recently, says Steven Katz, director of consumer communications for credit bureau TransUnion.

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