A sweeping state study has found that Texans with bad credit histories tend to file more insurance claims. But it also shows that blacks and Hispanics are disproportionately more likely to be hit with higher premiums because of low credit scores.
The study of 2 million policyholders released Monday led insurance industry officials to claim vindication for using credit scoring, saying there is a statistical correlation between insurance losses and consumer credit.
But consumer advocates argued that the statistics do not indicate that the factors leading to a poor credit rating also cause more insurance claims. Instead, they said, the study showed the rating system is discriminatory and should be ended immediately.
“This study shows that credit scoring is nothing more than economic redlining,” said Alex Winslow, executive director of the consumer-oriented group Texas Watch.
For this complete story, please visit Study Finds Bad Credit’s Costs.
