What Is Insurance Credit Scoring?
When you think of credit scoring the last thing that comes to mind is insurance credit scoring. A lot of people aren't even familiar with the term. It usually comes of great surprise that an insurance company can and do run credit checks on all of their customers. What is the purpose of insurance credit scoring and how did it get its start? Can insurance credit scoring affect my health and benefits? In a surprising twist, credit and healthcare come together.
In what is probably one of the more interesting categories in credit history, insurance credit scoring resides. Insurance credit scoring is the use of ones personal credit score to calculate that same person insurance plan and their cost of coverage. Much like a lender, the insurance company will be providing what can be a very costly service, in return for monthly payments. And just like lenders, insurance companies need to be reassured that their customers will make those payments and make them on time. Often times what they will do is raise the premiums of the coverage plans for those who have poor credit. The act of insurance credit scoring is sometimes disputed on the grounds that they are making medical coverage harder to obtain for those in need. All in all insurance credit scoring has been taking place for generations now and it is not likely to stop anytime soon.
Not all insurance companies perform insurance credit scoring, but many do as they claim there is a correlation between those who have a poor credit score and those who file a lot of medical claims. If you are opposed to the idea of your health benefits being affected by your credit score you can either switch to an insurance company that does not practice insurance credit scoring or you may ask how your credit score affects your eligibility and premiums. By law the insurance companies have to tell you exactly how the two affect each other. Unfortunately as the practice of insurance credit scoring becomes more common, the need for a good credit score becomes equally more important. The good news is that not all of ones eligibilities and premiums are based off of ones insurance credit scores. So even with a poor credit score health benefits are available. If you keep yourself in a good financial situation when it comes to your credit history, the insurance part of it should be a non-issue.
It's always fascinating to learn how credit scoring is creeping into every part of our society. While to some it may be frightening to others it's interesting. The theory behind credit scoring and insurance credit scoring is spreading. More and more companies who deal with regular customers are adopting these models to make prediction for a great number of things. Whether you like it or not these models are here to stay, so it's best to educate yourself about them so no matter who or what you're dealing with, you'll have the proper tools to succeed.
Credit Scoring
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