Read what Consumer Reports Magazine published by the nonprofit, Consumers Union, has to say about insurers using consumer credit scores:

• Caution! The secret score behind your auto insurance - August 2006. Excerpts:
  "An analysis by Consumer Reports found that scoring could cost many consumers hundreds of extra dollars. Here’s a typical example of how scores can hurt: a 28-year-old single male from Orlando, Fla., with a clean driving record and no accidents would normally pay State Farm Mutual $1,251 a year for a new policy. With one at-fault accident, his premium would rise to $1,447. If the same driver instead fell into the lowest ranking in State Farm’s credit-scoring system, however, his premium would shoot up to $2,600"
  
  "Even a driver with a great credit score whom lenders would normally bless with a low-interest mortgage could wind up with a less favorable insurance score and thus a high premium. That’s because formulations for insurance scores weigh credit data differently from traditional lender scores. Indeed, insurance scores can penalize consumers who use credit reasonably." Read the full article...
• Oregon to vote on banning credit-based insurance scores State legislative efforts to ban the use of credit-based insurance scores have had little success. This year, bills proposed in 18 states resulted in no new laws. But now consumers in Oregon are taking the matter directly to the public through a voter initiative.
  
  Earlier this month, the secretary of state of Oregon verified that a measure prohibiting the use of credit scores in setting insurance premiums had the requisite number of signatures to put it on the November ballot. More than 84,000 consumers signed petitions in support of ballot measure 42. Read the full article...
• Caught in the storm of insurance scores Most consumers don’t realize that their credit history can affect their auto- or homeowners-insurance premiums. The “insurance score” that companies use differs from the credit score that lenders use for mortgages and car loans; insurance scores pluck specific items from a credit record, rather than using the complete record.
  
  Insurance companies say that a low score is an indicator that a consumer is more likely to file a claim--in other words, that the insured will use the product he paid for. That’s unfair, because having a low credit score doesn’t necessarily make someone more likely to have a car accident or a house fire.
  
  Moreover, there are real concerns about the accuracy of credit data that insurers use. Despite those qualms, many states allow insurers to include credit-based information in setting premiums; too few states protect consumers in a meaningful way. Read the Full Article...
• INSURANCE SCORES Your August 2006 report on credit scores and how they affect insurance premiums could not have come at a more appropriate time. We had just received our homeowners renewal policy containing a Fair Credit Reporting Act Disclosure Notice stating that our insurance company was unable to offer its lowest premium based upon the insurance credit score from Equifax. The predominant factor influencing this score was “the unfavorable length of time since most recent retail account opened.” I suppose that now we need to rush out and sign up for more credit cards! - David Cox Bellport, NY Read More Consumer Experiences...

Consumer Reports Quick Take

Almost all insurers now use insurance scores derived from credit report data to set premiums and accept or reject customers. Insurers say that people who engage in certain credit activities, such as carrying high balances, will file more claims than others.

• Scoring systems can penalize consumers for reasonable credit usage. Opening three new accounts in the last year, including one credit card in the last four months, and then making two or more loan inquiries can increase your score--and boost your premium.
• Scores have no consistent effect on premiums. Because scoring methods vary from company to company, you can’t predict whether certain credit behavior will land you a low premium or a high one.
• State studies raise concerns that insurance scores may discriminate. Studies in Missouri, Texas, and Washington show that insurance scores have an adverse disparate effect on blacks, Hispanics, and the poor. The Federal Trade Commission is undertaking a nationwide study.
• Consumers have no legal right to information. Most insurers do not divulge scores to them. So consumers have no way of knowing what they can do to lower their premiums.