My Credit Got Better. Will My Rate Go Down?

WV & OH ONLY

"My credit score has gone up a lot since I bought my car insurance. Will my rate go down in West Virginia or Ohio, and how do I make that happen?"

Good for you. Fixing your credit is hard work, and it should count.

Better credit can lower your car insurance rate, but only after your company rechecks your credit, and the change generally takes effect at a renewal. In both West Virginia and Ohio, you can ask for a recheck once in a 12-month period. Better credit can also make other companies worth a fresh look, and you don't have to wait for your renewal to find out.

Your hard work ought to be rewarded automatically. We want you on the best rate you've earned.

Your current company might give you a little credit for it, or a lot, or none. We can run your new credit through 13 companies and see who rewards it the most.

This is the part where I ask you to call. You did the hard part. Let's go collect on it.

WV & OH ONLY

Bulletin 20-12 from the Insurance Commissioner covers it. For companies that use insurance scores for tiering or rating:

• Automatic recheck: at least within 36 months of the last score. A company can do it sooner, at any renewal.
• Your request: when you ask, the company re-underwrites and re-rates at renewal based on current credit. It doesn't have to do this more than once in 12 months.
• Timing: ask at least 45 days before your renewal. If you ask later than that, it waits for the following renewal.
• Exception: a company doesn't have to do the automatic recheck if you're already getting its best rate based on score alone.

That 36 months is the part that surprises people. If your company only rechecks when it has to, you could wait a long time without asking.

Ohio's rule says that once a policy is issued, the company has to recheck your credit at your written request, no more than once every 12 months. It can wait until the next renewal to do it. If the recheck shows a change, the company has to adjust your premium or coverage, and the change applies going forward to the next policy term.

The key word is written. A phone call is a fine place to start, but put the request in writing.

Yes, it could. The West Virginia notice says plainly that a change in your score may result in an increase or a decrease. If your score actually improved, a recheck should work in your favor, but a company's math isn't something I can see from here. Look at your full credit report before you ask, and make sure it really did improve.

This is the frustrating part. I can't point you to a simple place to look up your insurance score the way you check a credit score. The company that used it knows it, and under federal law a reporting company doesn't have to include risk scores when it gives you your file.

Here's what you can do:

1. Look at the ingredients. The CFPB says you can get free reports once a week at AnnualCreditReport.com.

2. Ask your company. The National Association of Insurance Commissioners suggests asking your insurer whether a credit-based score was used and which risk category it put you in.

3. Read any notice you've received. If credit cost you money, the federal notice should disclose the score used, and in West Virginia it should explain the reason in specific terms.

The NAIC's article gives FICO's general advice: pay bills on time, catch up quickly on anything past due and keep credit card balances low. That's about all anyone can honestly tell you, because the formulas aren't public.

Because you might be waiting for up to three years in West Virginia, and because your company might not be the one that rewards the change the most.

When I quote you today, the companies look at your credit as it stands today. If there's a better price out there, you can move whenever you like, and your other policies might bring the price down further if they're all under one roof.

You've spent years fixing your credit. Spend ten minutes finding out what it's worth.

WV & OH ONLY

Next in the series: Part 15, What If I Don't Have Any Credit?