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North Carolina Car Insurance and Credit Score

North Carolina car insurance companies can use an applicant’s credit score to determine rates. An insurer can offer a customer a discount based solely on his or her credit score, but this information cannot be used as the sole reason for raising a policyholder’s rates.

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Under state law, if an insurance company has decided to raise a customer’s rates based partly on his or her credit score, it must notify the customer in writing. The customer has the option of contesting the increase if he or she wishes to do so.

A policyholder who has received a letter from his or her insurance company indicating that a rate increase is partly based on credit information should get a copy of his or her credit report to make sure there are no errors on it. If a mistake has been made, the policyholder needs to write a letter to the credit reporting services asking that the record be corrected. It may take some time before this is done, and the credit report will need to be checked again in a few weeks to confirm that the negative information has been removed.

Once the credit report has been amended, the policyholder should contact the insurance company to advise it of the same and ask that the rate be adjusted to reflect the corrected information.

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