Answer: Your driving behavior

From Forbes:

The new FICO score will be built using data captured while you drive. A driver would have to install the eDriving smartphone telematics solution, which will “capture acceleration, braking, cornering, speeding, cellphone distraction, and other behavioral data, as well as provide the proprietary, predictive analytics platform to fuel the FICO Safe Driving Score.”

Your driving behavior will be captured, stored and analyzed in the same way that credit risk data is captured and stored by credit bureaus and analyzed by FICO. This data will then be used to create a score. If you are constantly speeding and using your cellphone while driving, expect a bad score. 

Wonder who might be interested in this data?

You can imagine a lot of companies would be interested in this data. FICO announced that an advisory board has been formed, and it contains representatives from insurance companies, brokers, fleet and incident management companies and car manufacturers. It is not hard to imagine a world where your auto insurance premiums and car rental rates could be determined by this score.

Questions:

• Insurers would love teens to use this smartphone app. Would you use it? Why or why not?
• What do you think insurers would assume about teens who chose not to use the app?
• What concerns would you have about this product?
• Would you drive differently if you knew your activities in the car were being tracked?
• What other questions would you have about this product before using it?

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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