Why a security freeze spiked my insurance premiums

Having a permanent security freeze in place has been both empowering and tiring since I visited the Web sites of the three major credit reporting agencies and signed up online back in January 2009. 

It's empowering because no one gets access to my credit report without my explicit permission. Say goodbye new account fraud. And to expensive credit monitoring services like FreeCreditReport.com. You don't need those services - ever.

It's tiring because no one tells you before they run a credit check. In the business world everyone expects unfettered access to your credit report, at any time, for any reason. No one ever asks you first. It's very rude, really. It's your most personal data, but they seem to consider it their data, not yours. And when they don't get it you receive an obtuse letter indicating that some service has been denied to you for some unknown reason.

This happened when I signed up with a new telephone carrier. It  happened again when I tried to sign up for instant credit offers, such as 10% off at JC Penney's or a one year same as cash deal at the Apple Store when you sign up for a VISA card on the spot.

If they could just tell me which credit reporting agency they used I could unlock it for them, I said. But I certainly wasn't going to pay $10 a pop to unlock all three. Unfortunately, no one on the front end of the sales process knows how to deal with this - and they don't know who to call to find out. They're just not set up to accomodate people who protect their credit reports in this way. 

A point system for premiums

My most recent hassle came today when I received a note from my insurance carrier. It says: "...we could not provide you with our best possible price" for my renewing policy because of "our use of your insurance bureau score...to rate your policy." Translation: They tried to access my credit report and were denied. Now, apparently, I am paying a higher premium for my policy, which went up this year.

What specific information did they want? The letter was very specific:

"The primary factors that impacted your homeowners/personal auto insurance bureau score were: insufficient information oil company accounts, # of open credit union , s&l or morgage accounts, # of non closed accounts, insufficient information on department store accounts, insufficient information on personal finance accounts."

After getting over my initial outrage over the use of "impact" as a verb, I pondered how this eclectic mix of credit report data would translate into a higher or lower homeowner's policy premium.

So I called the 800 number, and they boiled it all down to one number. They use my overall credit score as a risk indicator to raise or lower the premium I'm offered. They were entitled, per my original application years ago, to run such reports each year. 

The carrier isn't some fly by night operation. I do business with them and have since 1997. With 13 years of credit history with them I can't imagine why they would need this information for billing purposes. But apparently my credit score affects the price I'll pay for a policy. I want the lowest possible price, so I will, reluctantly, unlock my credit report for them.

That is, as soon as I can get through to someone there who can tell me which credit reporting agency they use.