Two or three weeks ago, Crabby Old Lady received the bill for renewal of her homeowners coverage. It was up 7.4 percent - too high but not enough to cause heartburn.
However, the accompanying premium for Crabby's auto insurance, due on the same day, shoved her about three miles past horrified: 30 percent greater than six months ago. Huh? No accidents, no other kind of damage or claim. What could be the reason?
When Crabby inquired by telephone at the office of her insurance agent, she got, instead of conversation, an emailed report informing her that a drop in her credit score had caused the increase.
Now before we go a single step further here, let Crabby tell you that she regularly checks her credit score. It is and has been for many years a handful of points below perfect. Now and then it goes up a couple of points or down a couple of points but literally no more than that.
There is a reason Crabby Old Lady has, in difficult times, gone without to pay her bills on time. Into anyone's life some rain will fall. You can count on it. Sometimes it is expensive rain and a superb credit score – particularly if, like Crabby, you have no relatives to fall back on – will get you through the storm. It has saved Crabby's butt more than once over the years.
In a second call to the agent, the only information Crabby could elicit is that the computer made the determination and therefore nothing can change it. (All hail HAL.)
Here are the (so-called) black marks that reduced Crabby's insurance score as assessed by one of the three standard bureaus:
• Average Balance on Open Auto Accounts: Not Available; Best possible is $8501-$11,000. (So if you paid cash for your car or even paid the loan regularly, you get marked down if the balance is outside arbitrary parameters?)
• Number of Credit Card Accounts on File: 9-23; Best Possible is 4-8. (False. According to the credit report itself, which Crabby downloaded, she has 10 credit cards on file, eight of them closed long ago.)
• % of Credit Card Limit Used: 0%-1%: Best Possible is 2%-10%. (Huh? Who makes these rules and based on what? Crabby's use is, as stated, about 1% per month. That's a credit crime?)
• Ratio of Open Credit Card Accounts to Total Open Accounts: 61%; Best Possible is 16%-34%. (False. Crabby has two open credit accounts – cards.)
Not a single one of these “reasons” makes the least bit of sense. It's all horsefeathers. Worse, no one at the insurance agent's office had anything to say to Crabby beyond, “it's what the computer said.”
A thirty percent increase is bad enough for anyone but for old people who live on fixed incomes, it can be a disaster. Crabby isn't saying the insurance companies are picking on elders necessarily, but still.
Okay. Enough. Crabby Old Lady is just whinging now and because you have been patient enough to get this far, here is your John Oliver treat several days early.
In a remarkable case of serendipity, last Sunday on Oliver's HBO program, Last Week Tonight, the main essay - as smart and funny as always - was about Credit Reports.
Apparently, you can't fight the credit bureaus but Crabby Old Lady won in the end. Her friend Ken Pyburn sent her to his insurance agent and lo, the new premiums for home and auto coverage identical to last year saved Crabby more than $300 a year. She'll take it and be happy.
Does any of this sound familiar to you?