Average FICO Credit Score Reaches 706 for the First Time in History, According to a New Study by vHomeInsurance
The study highlights the distinct parameters used in the calculation of the FICO credit scores and credit-based insurance scores. vHomeInsurance analyzed the financial market trends and the resources available with FICO and NAIC to publish a detailed study.
New York, NY (PRUnderground) December 20th, 2019
vHomeInsurance, a data-driven insurance research service, has published a new study on the underlying parameters that are involved in the calculation of FICO credit scores. The study highlights the distinct parameters used in the calculation of the FICO credit scores and credit-based insurance scores. vHomeInsurance analyzed the financial market trends and the resources available with FICO and NAIC to publish a detailed study.
vHomeInsurance published the study with an infographic that shows the increasing trend of average FICO credit score. The infographic also shows the different parameters used to calculate the FICO credit score and credit-based insurance score. While a person’s income is used as the primary parameter to calculate the FICO credit score, the cred based-insurance score is calculated based on how well a person manages his money. However, it is safe to say that higher insurance scores can be associated with positive credit scores. It also clears the misconception about parameters that are commonly thought to be involved in the credit-based insurance score calculation. Home insurers use different strategies and parameters to calculate home insurance rates depending on the demographic. However, the credit-based insurance score is one of the primary parameters used by most insurers to calculate the home insurance rates.
The average credit score across the country has witnessed an increasing trend for over a decade. Year after year, the average credit score has reached new heights than ever before. The dataset published by vHomeInsurance also has information regarding the average FICO credit score in recent years, the average FICO credit score by age, and states that have the highest FICO credit score. The District of Columbia witnessed the highest gain in the average FICO credit score, followed by California and Nevada. With respect to age, the average credit score was found to increase with the increase in age. People over 60 years of age had the highest average FICO credit score. On the other hand, people falling in the age group of 18 to 29 years had the lowest average FICO credit score. The study also talks about states that have laws preventing home insurers from using credit-based insurance scores to underwrite home insurance policy. Under the Federal law, if an insurer rejects the policy citing the insurance score of the homeowner, then the insurance company holds the responsibility to inform that the credit report was used as an evaluation criterion and make the data available at free of cost.
vHomeInsurance takes a data driven approach to help consumers evaluate the best home insurance companies and topics impacting the home insurance industry.