The current credit crunch can affect your insurance rates.

JoAnn McCord of Renton contacted KOMO News when her insurance company commented on her credit card activity.

"They sent me a letter and they said that since I had opened three credit cards within a 2-year period, that they couldn't give me the discounts that they normally would," she said. "I don't think credit cards have anything to do with your ability to drive."

But the insurance industry sees it differently.

According to one study, more than 90 percent of auto insurers use some form of credit scoring to determine your insurance risk and help set your insurance premiums.

And it doesn't stop with car insurance.

Companies are increasingly using credit information to calculate homeowners and renters insurance.

Their reasoning? The way you manage your financial affairs is a good predictor of your insurance risk.

As it turns out, McCord has excellent credit and gets great insurance discounts. But she's still disturbed that her rates just jumped 5 dollars a month- and her insurance company is nosing around in her credit.

"Because the amount of money I owe has nothing to do with my driving, especially when I'm paying my bills every month and I'm never late," she said.

Consumer advocates don't like it either, arguing that good drivers with bad credit can end up paying 20 to 50 percent more in auto insurance premiums.

But unless congress steps in to change it, your credit can be used as a factor in your insurance rates. They do not look at your full credit report, but do use factors surrounding your credit score to calculate your insurance score.

Tighter credit policies may mean quiet changes your credit score, so pay attention to due dates, balances and credit limits, which can be modified without notice.

More information:

Credit Scoring