Proposed Law Stops Car Insurance Companies Utilizing Credit Rating To Set Rates

by admin November 16, 2020, 1:09 am 1.1k Views

Another Usage for Your Credit History

You most likely know that your credit rating affects the interest rates you’ll pay for charge card and loans. Did you know that your credit rating could also affect your car insurance rates?

It can in all but three states (California, Massachusetts, and Hawaii). Those 3 states have banned credit-based insurance scoring– the use of credit rating in identifying vehicle insurance coverage premiums. Rep. Rashida Tlaib (D-MI) wish to make that restriction nationwide.

Rep. Tlaib is introducing a bill that would prohibit auto insurer from utilizing a client’s credit history to set rates for premiums. She declares that the practice discriminates against low-income Americans and substances ethnic and racial discrimination.

We Utilize It Since It Works

Insurers utilize credit-based scoring for one fundamental reason– it properly evaluates danger. Separate research studies from the University of Texas and the Federal Trade Commissio …

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