# Credit-Based Insurance Scores and Your Rights (FCRA)
Many people are surprised to learn that some insurers look at credit-related information when pricing a home or auto policy. It's a common practice, it's regulated, and — importantly — it comes with real rights for you. At BNW Services LLC (dba InsureToday24), we think you should understand what a credit-based insurance score is, how it may (or may not) affect your rate, and what protections you have under federal law. Here's the honest rundown.
What a Credit-Based Insurance Score Is
A credit-based insurance score is a number some carriers calculate using information from your credit history. It is not the same as the credit score a lender uses for a loan, and it doesn't reflect your income or wealth. Insurers who use it say it helps predict the likelihood of future claims. Where state law allows, a carrier may factor it into your premium alongside the usual things like your driving record, home condition, coverage limits, and claims history.
To understand how carriers weigh all these factors together, see What Affects Your Insurance Rate and What Is Underwriting in Insurance?.
It's Regulated — and States Set Limits
Two layers govern this practice:
- Federal law. The Fair Credit Reporting Act (FCRA), overseen in part by the Federal Trade Commission and the Consumer Financial Protection Bureau, controls how consumer-report information is collected and used, and gives you rights when it affects a decision about you.
- State law. Each state's insurance department decides whether and how insurers may use credit-based scores. The rules — including what's prohibited — vary by state and by line of coverage. For current specifics in your state, the Missouri Department of Commerce & Insurance and the Kansas Insurance Department are the authoritative sources.
Because rules differ by state and carrier, the effect on any given quote isn't one-size-fits-all. As an independent agency, we can shop the carriers we represent, and their approaches differ — another reason comparison shopping helps.
Your Rights Under the FCRA
This is the part worth remembering. If a carrier uses information from a consumer report and it results in a less favorable rate or a denial — what the law calls an adverse action — you have rights:
- The right to notice. The carrier must tell you that a consumer report played a role and identify the reporting agency that supplied it.
- The right to a free copy. You're generally entitled to a free copy of the report that was used, so you can see what's in it.
- The right to dispute errors. If the report contains mistakes, you can dispute them with the reporting agency, which must investigate. Correcting an error can improve your standing.
You can also get free copies of your credit reports through the official federal channel and check them for accuracy before you ever shop for insurance.
How BNW Handles This
We keep it transparent:
- We collect only the information needed to get you an accurate quote, as described in How We Protect Your Personal Information.
- If a carrier's pricing was influenced by a credit-based insurance score, we'll help you understand the adverse-action notice and your right to see and dispute the underlying report.
- Because we're independent, if one carrier's use of credit-based scoring hurts your rate, we can compare other carriers we represent that may weigh things differently.
Smart Steps You Can Take
- Check your credit reports for errors before shopping, and dispute anything wrong.
- Ask us to re-shop at renewal if your situation has improved — a rate set a few years ago may no longer be your best option.
- Keep the big picture in mind. Credit-based scoring is only one input; your driving record, claims history, coverage choices, and eligible discounts all matter too.
Questions about how your rate was set or whether a credit-based score played a role? Call (573) 594-5148 and a licensed BNW agent will walk you through it, or start at insuretoday24.com.
References
- Consumer Financial Protection Bureau (credit reports & disputes) — https://www.consumerfinance.gov
- Federal Trade Commission (FCRA & consumer reports) — https://www.ftc.gov
- National Association of Insurance Commissioners (NAIC) — https://www.naic.org
- Missouri Department of Commerce & Insurance — https://insurance.mo.gov
- Kansas Insurance Department — https://insurance.kansas.gov
Related
- What Affects Your Insurance Rate
- What Is Underwriting in Insurance?
- How We Protect Your Personal Information
- Your Rights as an Insurance Policyholder
- How Insurance Premiums Are Calculated
Watch
- What a credit-based insurance score is and how it differs from a credit score — search: "credit based insurance score explained how it affects your rate"
- Your rights under the Fair Credit Reporting Act (adverse action) — search: "FCRA adverse action notice consumer rights explained"