Junk mail can impact your credit rating

Junk mail can negatively affect your credit even if you don't open it. News on 6 consumer reporter Rick Wells talked to a man who believes junk mail may have trashed his credit rating and could have

Monday, March 10th 2003, 12:00 am

By: News On 6

Junk mail can negatively affect your credit even if you don't open it. News on 6 consumer reporter Rick Wells talked to a man who believes junk mail may have trashed his credit rating and could have cost him hundreds of dollars.

Rick shows us what the man did and what you can do if it happens to you. Joe Cole: "I worked hard all my life to keep my credit up, then for them to come along and treat me like some irresponsible deadbeat, I'm not gonna put up with it." Joe Cole is a former Farmers Insurance Group customer. Here's what happened. He got his homeowner renewal and the annual rate went from a $1,000 to $1,700. There were some increases in values, but nothing he felt should impact his rate by $700.

So he called the credit bureau, and got his credit report. Cole: "There's not a single credit account on this that doesn't say always pays on time. He was told there were ten inquiries on the bottom of his credit report and they were the culprit. Credit bureaus call these soft inquiries because they are initiated by the credit card companies, in this case Capital One. I got all four of these on the very same day in the mail. They are not supposed to impact your actual credit rating. Joe Cole was told they did, and as a result he switched insurance companies and is now a happy Hartford customer.

Cole: "I just don't think it's right that I got penalized for something I'm not responsible for." Neither does the Oklahoma State House. There is a bill moving through the legislature, House bill 1751, it specifically bars companies from using these so called soft inquiries as a factor in insurance rates. It passed the House and is currently in the Senate.

A representative in Farmersâ€™ state office told me the agent was misinformed. The agent told me he just told Mr. Cole what he was told. The fact is insurance companies in Oklahoma use credit scores to determine rates, so it's important to know how they work.

Each of the three major credit bureaus has a web site. Equifax allows you to find your credit score. Then determine various steps you can take to improve it.