Credit rate debate
In response to the article "Credit Scoring: Tough to explain, hard to beat" by Bart Anderson (AA&B 3/10), I don't believe that rates should be based on our clients' spending habits.
People grow up and their driving habits change. We only charge for minor violations for 3 years and major violations for 10 years (here in California). It can take longer than that to repair a client's credit. These are the same people who last year had excellent credit. Their driving habits have not changed, the economy has.
This is the time to rate on actual figures that have a direct correlation with the risk. Driving records, claims experience, age, geography, mileage, use, vehicle type and marital status are excellent rating factors. Most of these are choices that give the client an opportunity to change in the short term if they cannot afford insurance. Rating on credit in these times is not as accurate an interpretation of the client.
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