Credit Report
What Does Credit Report Mean?
A credit report provides detailed information about a person’s credit history and is often used to generate credit scores. These scores reflect a person’s evaluated creditworthiness.
In the context of insurance, auto insurance companies frequently use credit scores derived from credit reports as a metric to assess risk and determine premium pricing.
Insuranceopedia Explains Credit Report
Credit reports are based on factors such as the amount of debt a person has and their history of paying bills on time. Credit scores, derived from credit reports, range from 300 to 800. The closer a score is to 800, the more creditworthy the person is considered.
For auto insurance companies, higher credit scores often reflect lower risk. Many insurers believe that individuals with higher credit scores are less likely to be involved in auto accidents. As a result, a strong credit report and high credit score can lead to lower auto insurance premiums.
