For a pitifully short time, insurers were dancing in the streets, hailing a long-awaited Federal Trade Commission report concluding that credit scores are an “effective predictor” of risk for auto policies, as well as that the tool “may result in benefits for consumers.”
Not only didn't the party last, but the industry was left with a wicked hangover.
At first, carriers couldn't have been happier. The FTC report said credit scores “permit insurance companies to evaluate risk with greater accuracy, which may make them more willing to offer insurance to higher-risk consumers for whom they would otherwise not be able to determine an appropriate premium.”
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