Is Credit Scoring Valid?

To The Editor:

I read Michael Ha’s June 30 article on credit scoring with great interest (see “NAIC Credit Scoring Debate Heats Up,” page 6). I have listened to the insurance companies go on and on about how credit scoring is so accurate in predicting insurance claim activity. I personally find it difficult to believe the companies’ thinking on this subject.

One big reason is each company uses its own criteria to develop this number. I have on many occasions found a great difference for an insured between two different companies. If this number is so accurate, why the difference between companies? Is the insured more likely to have a claim with the company which assesses him with a lower credit score?

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