Insurance Notice Confusion
Can someone clarify what this notice from GEICO means for me?
“We are sending you this notice in compliance with the Fair Credit Reporting Act because your quote was affected by your credit information.
The consumer reporting agency has provided the following details about the credit factors that impacted the price we offered you:
- Average number of months trades on file is too short (-)
- Time since the oldest trade was opened is too recent (-)
- Too many non-bank revolving accounts in the last 5 years (-)
- Too many auto inquiries in the last 12 months (-)”
It looks like GEICO is informing you that your insurance premium may be higher due to factors in your credit history. Under the Fair Credit Reporting Act, they are required to notify you when your credit information affects the pricing of your policy.
Here’s a breakdown of what the notice means:
Average number of months trades on file too short (-): This indicates that you may have a relatively short credit history. Insurers often favor those with longer, positive credit histories as it gives them more information to assess your financial responsibility.
Time since oldest trade opened too recent (-): This suggests that your oldest credit account is relatively new. A longer-established credit line can positively impact your score and, by extension, insurance rates.
Too many non-bank revolving trades in last 5 years (-): This might mean you have several credit accounts (like credit cards) that are non-bank accounts. Having multiple accounts, particularly if they are new or carry high balances, can be viewed as a risk factor.
Too many auto inquiries in last 12 months (-): This refers to multiple inquiries into your credit report related to auto loans or insurance. Too many inquiries can indicate that you might be taking on new debt, which can negatively affect your creditworthiness in insurers’ eyes.
In summary, the notice explains that certain aspects of your credit report have led GEICO to determine a higher premium for your insurance. If you are concerned about your credit and how it impacts your insurance rates, you may want to review your credit report and consider taking steps to improve your credit score, such as paying down debts or ensuring timely payments on existing accounts. If you have further questions, contacting GEICO for clarification would also be a good idea.