If the insurer you’re considering to cover your property wants to see your credit score, you shouldn’t refuse.

The end result could be savings to you!

It’s become common practice: when you’re shopping around for either automobile or home insurance, the majority of insurers and brokerage firms—including CAA-Quebec—will ask for permission to look at your credit score. First of all, it’s important to know that you are free to refuse their request. But before you say no, read the following…

What is credit information, exactly?

Credit information is data that reflect the DNA of a consumer’s debt repayment behaviour—nothing more, nothing less. What is your payment history? Have you ever missed a payment? If so, has it happened often? Note that this is a reading of your credit score, not a credit inquiry. It will not affect the credit score itself.

Who will the insurer contact?

The score is usually obtained through TransUnion or Equifax, both of which are consumer credit reporting agencies.

Why is the insurer interested in your financial discipline?

After all, the only thing you’re asking them to do is insure your property, right? In fact, your debt repayment behaviour is an extremely predictive indicator of two determining factors in the prevalence of your financial losses: your capacity to maintain and renovate your property.

What’s the connection?

Studies have shown that when it comes to evaluating the likelihood of a customer filing claims in the future, credit information is a significant indicator.

In other words, if your prospective insurer compares your credit information with your claims history, this tells them something important: a low credit score means a higher likelihood of you experiencing a loss—and therefore of filing a claim. The opposite is also true.

And if you refuse…?

Insurers are required to ask for the customer’s consent before “pulling” their credit score. You should never feel obliged to grant consent in order to get a premium quote. You have the right to refuse. And if you do, the insurer is still required to reply to your quote request.

An insurer cannot terminate, or refuse to renew, a contract on the grounds that you have not consented to them looking up your credit score. However, you might not benefit from the best premium for your needs.

What if you have doubts about the quality of your credit score? 

You can always ask for a copy of your credit score. Once you have it, you can decide whether letting your insurer see it is to your advantage. Make this request before you shop for your new insurance. That way, if there are any errors (yes, this can and does happen!) you can have them corrected. Ask to receive your credit score by mail; this service is free, unlike some online requests.

To make a request:

TransUnion

EquifaxPDF file