Does Bad Credit Make You a Bad Driver?

In article >,
Scott en Aztl?n > wrote:

> Does having bad credit make you a bad driver? Some auto insurers think
> so. That's why they're using credit data to help determine your
> insurance rates.

> Drivers at the bottom of the credit heap file 40% more claims than
> drivers at the top of the credit heap, according to a study by the
> Insurance Information Institute.

This is a case of bad journalism and the reporter not understanding
the words that they are writing. The 2nd paragraph contains a
piece of factual data that was gleaned from data mining.

The first paragraph is attempting to establish a causal
relationship. If a, then b. What is actually happening here is
that both a and b are found to happen to the same class of
people. A and b are coincidental to each other even though
both are caused by the same factor.

Bad credit does not make one a bad driver. However, it was
found that people who have bad credit are more likely to make
claims, and a person who makes a claim is more likely to have
bad credit.

There are all kinds of companies checking your credit and
medical files these days. As a result, it is a good idea to
try to keep both types of records as clean as possible.

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708
Newave Communications http://www.johnweeks.com
================================================== ====================

"John A. Weeks III" > wrote
> Scott en Aztl?n > wrote:
>
>> Does having bad credit make you a bad driver? Some auto insurers think
>> so. That's why they're using credit data to help determine your
>> insurance rates.
>
>> Drivers at the bottom of the credit heap file 40% more claims than
>> drivers at the top of the credit heap, according to a study by the
>> Insurance Information Institute.
>
> This is a case of bad journalism and the reporter not understanding
> the words that they are writing. The 2nd paragraph contains a
> piece of factual data that was gleaned from data mining.
>
> The first paragraph is attempting to establish a causal
> relationship. If a, then b. What is actually happening here is
> that both a and b are found to happen to the same class of
> people. A and b are coincidental to each other even though
> both are caused by the same factor.
>
> Bad credit does not make one a bad driver. However, it was
> found that people who have bad credit are more likely to make
> claims, and a person who makes a claim is more likely to have
> bad credit.
>
> There are all kinds of companies checking your credit and
> medical files these days. As a result, it is a good idea to
> try to keep both types of records as clean as possible.

Nice post.

One might note that apartment managers check credit - it is
currently the best metric on how "good" a renter might be.
Note that this doesn't say the renter won't trash an apartment,
only that they will be the least trouble, pay their bills, and be
least likely to have to be evicted. Apt. managers factor in
costs apportioned to *all* rents to pay to rehabilitate trashed
apartments (self-insured!)

Floyd

"John A. Weeks III" > wrote
> Scott en Aztl?n > wrote:
>
>> Does having bad credit make you a bad driver? Some auto insurers think
>> so. That's why they're using credit data to help determine your
>> insurance rates.
>
>> Drivers at the bottom of the credit heap file 40% more claims than
>> drivers at the top of the credit heap, according to a study by the
>> Insurance Information Institute.
>
> This is a case of bad journalism and the reporter not understanding
> the words that they are writing. The 2nd paragraph contains a
> piece of factual data that was gleaned from data mining.
>
> The first paragraph is attempting to establish a causal
> relationship. If a, then b. What is actually happening here is
> that both a and b are found to happen to the same class of
> people. A and b are coincidental to each other even though
> both are caused by the same factor.
>
> Bad credit does not make one a bad driver. However, it was
> found that people who have bad credit are more likely to make
> claims, and a person who makes a claim is more likely to have
> bad credit.
>
> There are all kinds of companies checking your credit and
> medical files these days. As a result, it is a good idea to
> try to keep both types of records as clean as possible.

Nice post.

One might note that apartment managers check credit - it is
currently the best metric on how "good" a renter might be.
Note that this doesn't say the renter won't trash an apartment,
only that they will be the least trouble, pay their bills, and be
least likely to have to be evicted. Apt. managers factor in
costs apportioned to *all* rents to pay to rehabilitate trashed
apartments (self-insured!)

Floyd

On Tue, 14 Dec 2004 15:04:36 -0600, "spamhater" <spamhateratmunged>
wrote:

>
>"Steve" > wrote in message
.. .
>> Scott en Aztlán > wrote:
>> >Does having bad credit make you a bad driver? Some auto insurers think
>> >so.
>>
>
>not necessarily. I had some credit problems about ten years ago after a
>combo of divorce, lost job/lost insurance, and medical problems -- very good
>credit to very bad credit back to very good agaion eventually-- but i
>haven't had accident or ticket of any kind for almost 30 years now. no
>relationship between the two.
>
>

Sorry, but your personal experience does not constitute a
statistically significant sample.

On Tue, 14 Dec 2004 15:04:36 -0600, "spamhater" <spamhateratmunged>
wrote:

>
>"Steve" > wrote in message
.. .
>> Scott en Aztlán > wrote:
>> >Does having bad credit make you a bad driver? Some auto insurers think
>> >so.
>>
>
>not necessarily. I had some credit problems about ten years ago after a
>combo of divorce, lost job/lost insurance, and medical problems -- very good
>credit to very bad credit back to very good agaion eventually-- but i
>haven't had accident or ticket of any kind for almost 30 years now. no
>relationship between the two.
>
>

Sorry, but your personal experience does not constitute a
statistically significant sample.

On Tue, 14 Dec 2004 16:14:13 -0600, "John A. Weeks III"
> wrote:

>In article >,
> Scott en Aztl?n > wrote:
>
>> Does having bad credit make you a bad driver? Some auto insurers think
>> so. That's why they're using credit data to help determine your
>> insurance rates.
>
>> Drivers at the bottom of the credit heap file 40% more claims than
>> drivers at the top of the credit heap, according to a study by the
>> Insurance Information Institute.
>
>This is a case of bad journalism and the reporter not understanding
>the words that they are writing. The 2nd paragraph contains a
>piece of factual data that was gleaned from data mining.
>
>The first paragraph is attempting to establish a causal
>relationship. If a, then b. What is actually happening here is
>that both a and b are found to happen to the same class of
>people. A and b are coincidental to each other even though
>both are caused by the same factor.
>
>Bad credit does not make one a bad driver. However, it was
>found that people who have bad credit are more likely to make
>claims, and a person who makes a claim is more likely to have
>bad credit.
>

Yep - they're measuring risk.

Does driving a sports car make you a bad driver? Of course not, but
you'll pay more in insurance for it.

I asked my agent a few years ago how much my insurance would be if I
bought a 'vette. He said I'd likely be cancelled.

>There are all kinds of companies checking your credit and
>medical files these days. As a result, it is a good idea to
>try to keep both types of records as clean as possible.
>
>-john-

On Tue, 14 Dec 2004 16:14:13 -0600, "John A. Weeks III"
> wrote:

>In article >,
> Scott en Aztl?n > wrote:
>
>> Does having bad credit make you a bad driver? Some auto insurers think
>> so. That's why they're using credit data to help determine your
>> insurance rates.
>
>> Drivers at the bottom of the credit heap file 40% more claims than
>> drivers at the top of the credit heap, according to a study by the
>> Insurance Information Institute.
>
>This is a case of bad journalism and the reporter not understanding
>the words that they are writing. The 2nd paragraph contains a
>piece of factual data that was gleaned from data mining.
>
>The first paragraph is attempting to establish a causal
>relationship. If a, then b. What is actually happening here is
>that both a and b are found to happen to the same class of
>people. A and b are coincidental to each other even though
>both are caused by the same factor.
>
>Bad credit does not make one a bad driver. However, it was
>found that people who have bad credit are more likely to make
>claims, and a person who makes a claim is more likely to have
>bad credit.
>

Yep - they're measuring risk.

Does driving a sports car make you a bad driver? Of course not, but
you'll pay more in insurance for it.

I asked my agent a few years ago how much my insurance would be if I
bought a 'vette. He said I'd likely be cancelled.

>There are all kinds of companies checking your credit and
>medical files these days. As a result, it is a good idea to
>try to keep both types of records as clean as possible.
>
>-john-

Olaf Gustafson > wrote:
>Sorry, but your personal experience does not constitute a
>statistically significant sample.

But...but...what if he weighs a LOT? What if he has multiple
personalities??

Olaf Gustafson > wrote:
>Sorry, but your personal experience does not constitute a
>statistically significant sample.

But...but...what if he weighs a LOT? What if he has multiple
personalities??

Andrew White > wrote:
>>>Does having bad credit make you a bad driver? Some auto insurers think
>>>so.
>>
>>Yeah, but I've never seen the scientific proof.
>
>The fact that you haven't seen it doesn't mean it doesn't exist. I
>personally have never seen the Eiffel Tower.

Thank you Andrew, another elucidating post. Perhaps the Eiffel Tower
doesn't exist, or perhaps it's a bad driver.