Credit Report
What Does Credit Report Mean?
A credit report is a report that provides details about a person's credit history. Credit reports are used to help create credit scores. Credit scores help reveal a person's evaluated creditworthiness. In the context of insurance, auto insurance companies commonly use credit scores based of of credit reports as one metric for evaluating risk and for pricing premiums.
Insuranceopedia Explains Credit Report
Credit reports are based on how much debt a person has, and how well he or she has been able to pay his or her bills. Credit scores, which are based on credit reports, provide a score from 300-800. The higher the credit score, and the closer it is to 800, the more the more creditworthy the person is deemed to be. This can reflect a lower risk for auto insurance companies. The reason is because many auto insurance companies believe that people with higher credit scores are less likely to cause auto accidents. So, the better the credit report, and resulting credit score, the lower one's auto insurance premiums may be.
