Click the play button on the video window to the right to see the storyRick Russell was more than shocked when he got his auto insurance renewal in the mail.
“I am angry. It's ridiculous,” said Russell. He told us he never had an accident and never had a ticket.
Russell has two auto policies: one for his motorcycle and one for his cars.
While the rates for his cars did not change, the premium on the motorcycle went up -- not because of an accident or ticket, but because his credit rating fell.
“Insurance should be based on your skills set to operate a vehicle,” said Russell, not your credit rating.
We contacted the American Insurance Association to find out what can affect your premiums.
They told us insurance companies use your credit score to figure your insurance score.
It is basically based on your predicted behavior -- how many times they think you'll file claims and how expensive they will be.
They call this "risky behavior".
Among Russell's “risky behavior” was applying for credit in the last two years and not getting his first credit card until he was 25.
And that is just one of the criteria. You can pay more if you are a smoker, if you drive during rush hour, whether you are a good student or not and how many miles you drive.
Different companies use different criteria -- so shop around.
Russell already did and signed with a new company.
This is another reminder to keep a close eye on your credit report.
It affects interest rates on mortgages, car loans and insurance rates!
There is one place to get a free credit report. It is
annualcreditreport.com.
