Insurance Notice:
Can someone clarify the meaning of this notice I received from GEICO?
“We are sending you this notice, as required by the Fair Credit Reporting Act, because your quoted price was higher due to your credit information.
According to the consumer reporting agency, the following credit factors played a significant role in determining the price we provided:
- Average number of months of credit history is too short (-)
- Time since oldest account opened is too recent (-)
- Excessive non-bank revolving credit accounts in the last 5 years (-)
- Too many auto loan inquiries in the past 12 months (-)”
It looks like GEICO is informing you that the price they quoted for your insurance policy was influenced by information from your credit report. This notice is a requirement under the Fair Credit Reporting Act, which mandates that companies notify consumers when their credit information has a negative impact on pricing.
Here’s a breakdown of the factors they mentioned:
Average number of months trades on file too short (-): This means that the length of your credit history is relatively short. Insurance companies often view a longer credit history as a sign of stability, so a shorter average may lead to higher rates.
Time since oldest trade opened too recent (-): This indicates that your oldest credit account was opened recently. A longer history of managing credit can positively impact insurance pricing.
Too many non-bank revolving trades in last 5 years (-): This suggests you’ve opened several credit accounts (like credit cards) that aren’t with traditional banks in the last five years. Having too many recent accounts can be viewed negatively by insurers.
Too many auto inquiries in last 12 months (-): This means that multiple lenders have checked your credit in relation to auto loans or insurance quotes. Too many inquiries can signal to insurers that you may be a higher risk.
Overall, these factors suggest that your credit profile has characteristics that insurers may view as risky, which can lead to higher insurance quotes. If you’re looking to potentially lower your insurance rate, you might consider working on improving your credit over time, like reducing the number of new credit applications and maintaining older accounts. If you have any questions or need more specific advice, consider reaching out directly to GEICO or consulting with a financial advisor.