Last Updated: August 2023
It is our mission to educate and inform our customers, regulators, and consumers regarding the use of data in insurance, proactively and with transparency to help make clear the difference between credit-based insurance scores and financial credit scores (aka “credit scores”).
LexisNexis Risk Solutions is committed to the responsible use of data. We have been working with the insurance industry and regulators for years to analyze risk at the individual, household and book-of-business levels to help insurers offer individualized, appropriate premiums for the risk being covered. Our solutions also help prevent fraud, thereby keeping insurance costs lower.
Our credit-based insurance models and attributes are designed with the Fair Credit Reporting Act (FCRA) in mind. Consumers have the right to know what is used in developing their scores and we have a dedicated team and process that focuses on providing a smooth, secure experience to help consumers obtain a copy of their consumer report information from the LexisNexis Risk Solutions Consumer Portal.
In the Frequently Asked Questions below, we answer common questions about credit-based insurance scores, the difference between a credit-based insurance score and a financial credit score, and what to do if a correction is needed.
Credit-based insurance scores play an important role in the insurance process and are widely used across the industry in connection with the underwriting of insurance involving the consumer.
Sometimes there can be confusion between financial credit scores and credit-based insurance scores. Financial credit scores are designed to predict an individual's creditworthiness or a consumer’s likelihood of repaying a loan.
A credit-based insurance score, however, is a predictor of future insurance loss. An individual’s credit report may contain no negative factors from the standpoint of determining a consumer’s eligibility for financial credit, but it may still indicate some degree of risk that an insurance loss will occur. According to the Insurance Information Institute (III), ‘Statistically, people with a lower insurance score are more likely to file a claim. This allows carriers to better match insurance premiums with the risk that an individual insured might pose, helping prevent better risks from subsidizing bad risks.’
Credit-based insurance scores may consider much of the same consumer credit information as financial credit scores, but the insurance-specific models are designed to analyze an individual’s propensity to have a loss. For personal lines of insurance, such as auto and home, credit-based insurance scoring enables insurers to better analyze a consumer’s potential risk of loss and more accurately assess the consumer’s appropriate premium. Most scoring systems generate “reason codes” in addition to the numeric score. The reason codes will identify up to four principal factors that influenced the score.
The Insurance Information Institute (III) also points out that credit-based insurance scores are not the sole factor insurers use to underwrite and price insurance. For example, in auto insurance, various other factors (such as years of driving, prior losses, and driving behavior data) can be combined with credit-based insurance scores. In homeowner’s insurance, other factors may include the home’s age and construction, location and proximity to water supplies for firefighting, and proximity to flood risks.
If you have been adversely affected by information contained in a consumer report, you may request your file from the consumer reporting agency that provided it. LexisNexis Risk Solutions will provide your file at no cost to you any time you make the request.
The Fair Credit Reporting Act is a federal law designed to promote the accuracy, transparency, and permissible use of information furnished to users deciding eligibility or underwriting criteria to credit, employment, insurance and other permitted eligibility uses. Among other things, the FCRA requires that:
LexisNexis® Risk Solutions is a global business that provides services primarily to prevent and investigate identity theft and other crimes, or to manage risk in businesses, including insurance. As a long-standing reseller of credit reports obtained from nationwide consumer reporting agencies and provider of advanced analytics and predictive models, we provide access to credit-related information to insurance companies and agents. The information returned to the insurance company or agent to help assess the risk can include the full credit report, a subset of the credit report or a credit-based insurance score. Information returned may also include: reason codes, which indicate the principal reasons why a consumer may have received a certain score (or less than perfect score); a customized message based on the credit data and the carrier's underwriting guidelines; or a combination of this information per a customer’s request.
For the purposes of returning a credit-based insurance score pertaining to a consumer that is being used for one of the permissible purposes outlined by the Fair Credit Reporting Act (FCRA), LexisNexis Risk Solutions is considered a consumer reporting agency as defined by the FCRA. LexisNexis Risk Solutions is not an insurance company; LexisNexis Risk Solutions does not make underwriting decisions or determine insurance underwriting guidelines. The role of LexisNexis Risk Solutions is to supply consumer reports to the insurance carriers, which the carriers can use in connection with the underwriting of insurance for the consumer about whom the report relates.
A reason code is used by insurers and consumers to better understand the credit attributes that inform a credit-based insurance score.
To provide a better understanding of our credit-based insurance scores, LexisNexis makes available a list of reason codes and their meaning. If you received a notice from your insurance company that shows the LexisNexis Attract score was used and you have a reason code associated with your score, you can select the reason code number at the link below and you will receive the expanded explanation for what the reason code means.
Click here to learn more about the various reason codes that impact a credit-based insurance score.
If you are interested in learning about your LexisNexis® Attract™ score, please visit www.consumer.risk.lexisnexis.com.
Only financial inquiries, such as loans or extension of credit, initiated at the consumer’s request can affect credit-based insurance scoring models. Other inquiries (such as auto loan inquiries) may be counted only once if multiple inquiries appear over a given period of time. Conversely, certain types of inquiries may not be used in some insurance or financial scoring models (such as inquiries made by insurance carriers).
Inquiries made for account reviews, promotions or insurance purposes are also not used in calculating credit-based insurance score. Finally, any other variables that, by law, may not be considered are also not used in calculating the score.
Be aware that if a credit report is obtained via LexisNexis Risk Solutions, the name of the ordering entity posted on the inquiry may be shown as LexisNexis Risk Solutions (which orders the report as a reseller), the name of the insurance company on whose behalf LexisNexis Risk Solutions places the order, the name of the insurance agent/agency on whose behalf LexisNexis Risk Solutions places the order, or some combination of these names. Again, this will not display as a financial inquiry and will not affect your credit-based insurance score.
Decisions about insurance coverage and/or rates are made by insurance companies.
Each insurance company develops underwriting decisions based on their own business requirements. Studies have shown a correlation between a consumer's financial behaviors, driving, and loss histories and their future insurance loss potential. Depending on a company's own underwriting practices, an insurer may consider a number of other factors. Examples of potential factors used by carriers include:
Credit-based insurance scores provide an objective and consistent tool that insurers may use along with other applicant information to better predict the likelihood of having a future insurance loss. These scores also help streamline the carrier’s decision-making process, so policies can be issued more efficiently. By predicting the likelihood of future losses, insurers can have better insight into the risk, enabling them to offer insurance coverage to more consumers at a fair cost.
Variables that are NOT used in calculating a credit-based insurance score include:
Credit-related variables that may be included in calculating a credit-based insurance score are:
Some states have adopted the National Council of Insurance Legislators’ recommendations regarding credit-based insurance scores. For example, its Model Act Regarding the Use of Credit Information in Personal Insurance states, “Notwithstanding any other law or regulation, an insurer that uses credit information shall, on written request from an applicant for insurance coverage or an insured, provide reasonable exceptions to the insurer's rates, rating classifications, company or tier placement, or underwriting rules or guidelines for a consumer who has experienced and whose credit information has been directly influenced by any of the following events: 1. Catastrophic event, as declared by the federal or state government 2. Serious illness or injury, or serious illness or injury to an immediate family member 3. Death of a spouse, child, or parent 4. Divorce or involuntary interruption of legally-owed alimony or support payments 5. Identity theft 6. Temporary loss of employment for a period of 3 months or more, if it results from involuntary termination 7. Military deployment overseas 8. Other events, as determined by the insurer.”
A consumer reporting agency may only disclose a consumer report for specific permissible purposes defined in the FCRA. Consumers can call the LexisNexis Risk Solutions consumer center to request a copy of their file.
As required by the FCRA, when a consumer contacts the LexisNexis Risk Solutions consumer center, LexisNexis will work with the consumer to confirm their identity and provide a copy of their file.
Consumers may dispute information contained in their file at any time. LexisNexis Risk Solutions will reinvestigate disputed information and remove or correct the information as appropriate.
If a consumer contacts LexisNexis Risk Solutions following receipt of an Adverse Action letter from their insurer, the consumer will receive a copy of their file. Please note that the sample file includes all types of information that could be included in a file, whereas a copy of a consumer’s actual file will be unique to the requesting consumer. The consumer can dispute any information they believe to be incorrect contained in their file.
If you want to order a copy of your file, you can contact LexisNexis Risk Solutions at https://consumer.risk.lexisnexis.com/ or by telephone at 866-897-8126.
Generally, pursuant to the Federal Fair Credit Reporting Act, no consumer reporting agency may make any consumer report containing any of the following information:
Your score can change if financial credit activity and information in your credit report that is used to determine the score changes.
Only your insurance agent or company representative can answer these questions about their decision.
If your insurance company has sent you an adverse action notification, please contact the LexisNexis Consumer Center at 866-897-8126 to request a copy of your file. Please be ready to provide some personal identifiable information in order to allow us to authenticate your identity. If your insurance carrier provided a reference number on the adverse action letter you received, please be ready to provide it as well. This will help expedite the process.
You have the right to dispute any information included in your file you believe to be incomplete or inaccurate. If you identify information in your file that is incomplete or inaccurate, and report it to the consumer reporting agency that provided your file, the consumer reporting agency must reinvestigate unless your dispute is frivolous. See www.consumerfinance.gov/learnmore for an explanation of dispute procedures.
You can contact the LexisNexis Risk Solutions consumer center at https://consumer.risk.lexisnexis.com/ or by telephone at 866-897-8126 to request a copy of your file.
No. If your credit-based insurance score has changed or if any of the underlying information used to generate it has changed, we recommend reaching out to your insurer and asking them to request a new consumer report for a new quote.
To add a consumer statement in your file maintained by the nationwide consumer reporting agencies, contact the nationwide consumer reporting agencies. You can also request the insertion of a consumer statement in your LexisNexis Risk Solutions file by contacting LexisNexis Risk Solutions at https://consumer.risk.lexisnexis.com/ or by telephone at 866-897-8126.