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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: NOW who wrote (34899)	6/28/2005 12:17:56 PM
From: benwood	Respond to of 110194

My auto company, PEMCO, mostly in the NW I think, changed the way they do business about 2 1/2 years ago. Now they get this "insurance" credit score from Equifax and their brethren -- not the FICO score. This is a different, secret one that they use to assess your insurance riskiness (as if your friggin' driving record can't do that...). So now they charge x for your policy, and apply a discount if your score is high enough. The top discount is 35% I think, and I missed that by 4 points (I forget the exact cutoffs, but I think I had 696 and the cutoff was 700). So my discount was "only" 25%. Thus I paid .75x the premium rather than .65x the premium -- mine is therefore 15.4% higher that it could have been. Now that my teen is on the account, my premium is over $2000 I believe, so that (.75x - .65x)2000 = at least 200 per year extra. My insurance co. said I had too many revolving cards (Nordstrom, Sears, etc.). I haven't actually closed any yet -- as somebody else said, longevity is a factor, although I'm not certain about the insurance score which is calculated differently. My refi-s seem to have lowered my score because it shortened those loan periods. Last year my score went up because my refi was another 12 months older, and so this year I believe I'll be in that top bracket (2 1/2 years since the refi). So what this all means is that opening that Eddie Bauer account to get 15% off those purchases the first day, as my wife did last year, potentially will cost us $200 this year, and perhaps next. She did save almost $25 though... I already have dead-beat VISA/MC with generous rewards -- 2% up to $500 towards new or used auto of any kind (three year expiration on rewards), and another that just pays 1% of everything as a monthly credit.