Posted On: August 23, 2007, 12:09 pm CDT

Posted By: actuary

There have been three government sponsored studies on credit scoring available to the public.

1) Texas Study
2) Federal Trade Commission
3) Federal Reserve (indirectly)

All three of these studies have supported the idea that credit scores improve predictive accuracy of future losses. This is in addition to countless private studies by industry that have arrived at the same conclusion.

Notice that above I said "improve" the prediction of losses and not "replace existing factors". Items such as age,territory, violation points, and previous claims history still have a significant role, but adding credit to the equation has clearly been shown to improve predictive power. PERIOD.