Credit Freezes, Insurance Rates and Credit Scores

After the Equifax data breach which put 145.5 million people at risk for identity theft people were struggling to get their credit reports frozen at Equifax as well as TransUnion and Experian.  If you were able to freeze all of your reports, you know it was a big hassle.

Now if you want to buy a house or car or apply for a credit card, you will need to contact the credit reporting agencies to have them turn your credit report back on so they can pull your credit and get a credit score.  If you have to do this, I suggest you find out which credit reporting agency they use so you can temporarily unfreeze just the one.  Speak with the credit reporting agency to find out how long it will take to temporarily unfreeze your report so you can give the financial loan company lead time before they pull your credit.

But what about insurance credit scoring?  In states where carriers are able to use credit scoring for rating, does the rate reflect a no hit for everyone who has put a freeze on their credit reports?  

I posed this question on LinkedIn:

Question for my insurance industry friends:

With the Equifax data breach and everyone freezing their credit reports, how are insurance carriers quoting potential and current customers?  Are people getting dinged for a no-hit on their credit report?  If yes, how is this getting addressed with the agent and insured?

Sadly, no one on LinkedIn responded to my questions. So I checked with our Business Development Project Coordinator who works closely with our carrier partners and asked her to reach out to a few carriers.

Several responded to our inquiry.  One response came from a large carrier who reached out to their insurance score department to ask about frozen credit files.  In the states where they are able to use credit scoring, if a credit file is frozen, the rating system treats it the same as a No Hit score which does generally result in a higher rate.  They suggest customers with a frozen credit file will need to contact Equifax to have the freeze lifted, call their insurance score department to pull the file while the customer is still on the phone and re-rate the policy.  Then the customer can contact Equifax to turn the credit freeze back on.

Are you noticing higher rates since the Equifax data breach and mass credit freezes?  Are you asking your clients if they have put a freeze on their credit?  Are your clients receiving notifications from the carrier that their credit was returned as a no hit?

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