Debate arises over insurer use of credit scores.

• Position: On First Reading - Brief Article

Insurance companies look at a wide array of personal factors when deciding whether to offer someone insurance and what to charge. But insurer use of credit scores is forcing lawmakers in statehouses across the country to consider whether the way people manage their finances directly relates to how they operate a car or maintain a home.

Insurance laws in all states prohibit "unfair" discrimination. This bans the use of such factors as race, religion and national origin to determine insurance eligibility. Other factors can be considered as long as they are supported by actuaries.

As a result, many insurers refuse to cover people with histories that include bankruptcy, bad driving records, convictions for driving under the influence of alcohol or drugs, repossessions and other negative marks.

Insurers also charge different rates depending on such things as a person's claim history, where a person lives and--for car insurance--age, sex and marital status.

So what makes credit different?

Nothing, say insurers, who contend that people with better credit scores tend to file fewer and less expensive claims than people with lower credit scores. A credit score is a three-digit number derived from information in a person's credit report. A good credit report equals a higher credit score; a bad report ensures a low score. No or little credit can also result in a low score.

Insurers say that using credit scores allows them to predict risk more accurately and offer lower rates to drivers who have good credit.

Others--including many consumers--argue that credit has nothing to do with insurance and credit score use, can harm the groups most likely to have bad or no credit--women, people of color...