I recently upgraded from an old (really old) Acura to a newer (almost new) Civic. I called my insurance company to report the change. I then received an absurd letter stating that I would be receiving a "good," but not the "best," insurance rate. Why? Because my credit score was very good, but not the "best." Reason stated: because I had "too few" credit cards, even though they are paid as agreed and in good standing.

A big problem here: My auto insurance rate should be based on factors including "too many miles driven" or "too many moving violations or fender benders," not a credit score, especially one based on flimsy data such as "too few" credit cards.

But it's worse if you're non-white.

As syndicated Washington Post financial columnist Michelle Singletary points out in her Color of Money column Your Car and Your Credit today:

Consumer advocates say using credit scores to set insurance rates unfairly hurts African Americans and Hispanics because those groups tend to have lower credit scores and thus end up paying more for their auto insurance. They also complain that errors in credit files can result in lower scores and therefore higher insurance premiums.