Action 9 investigates car insurance and credit scores

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ORLANDO, Fla. - An Orlando man with a perfect driving record can't believe his auto insurance company just canceled his coverage. The reason: his credit card and loan balances were too high.

Faron Gunter said he never had an accident and no traffic tickets in years, so State Farm canceling his auto insurance was a shocker.

"I couldn't actually believe what I was seeing," said Gunter.

State Farm's notice said the policy was canceled because his credit card and loan balances were too high and some bills weren't paid on time. A low credit score cost Gunter car insurance.

"I think this tactic is actually pretty shady," Gunter said.

Ten states prohibit insurance companies from using credit scores, but a proposed ban in Florida failed in the legislature two years ago.

Many consumer groups call the practice unfair, even outrageous, because failing to pay bills on time doesn't mean you're a bigger risk on the road.

The Center for Economic Justice found the practice actually punished minority and low-income customers with good driving records.

"This is an opportunity to raise rates on consumers for things unrelated to risk," said executive director Birny Birnbaum.

State Farm could not comment on Gunter's complaint but said credit history is just one factor it uses, including driving history, age and location.

Insurance experts said if a credit score changes your policy, change companies.

"Not all companies place the same weight on the same data. Your best bet is to shop around, ask questions," said insurance expert Tom Cotton.

State Farm told Gunter it could issue a new policy if he paid three times more than the original quote.

"It's definitely not fair," said Gunter.

If you suffered a sudden hardship, you can appeal a rate increase. The insurance industry said its studies have proven lower credit scores do create a higher risk for claims.