Does My Credit Score Affect Car Insurance
In most states insurers use a credit based insurance score as one factor in your rate, though a handful of states don't allow it at all.
Yes, in most states it's one factor among several
Insurers in most states are allowed to use a credit based insurance score when they set your rate. This isn't your regular credit score. It's a separate score built from your credit file that insurers use to help predict risk, alongside things like your driving record, your age, and where you live.
A few states don't allow insurers to use credit at all when pricing auto insurance. Whether this applies to you depends entirely on the state you're in, so it's worth asking your insurer or agent directly whether credit played a role in your quote.
Your state decides whether credit counts
Some states bar insurers from using credit history in auto insurance pricing. In those states, your rate is built entirely from your driving record, your coverage choices, your car, and similar factors.
In the states that do allow it, insurers vary in how much weight they give it. One insurer might weigh it heavily, another might weigh it lightly, and a third might ignore it even where it's legal. That's one reason the same driver can get different quotes from different companies.
If you want to know whether this applies to you, ask your insurer or agent whether they use a credit based insurance score in your state and whether it affected your current rate.
If you move to a different state, this can change even if nothing else about your driving does.
What most people get wrong about it
People often assume insurers pull their regular credit score, the same one used for a mortgage or a credit card. They don't. Insurers use a credit based insurance score, built from a different formula that looks at things like payment history and length of credit history, but weighs them differently than a lender would.
Another common mistake is assuming a thin credit file hurts you the same way a poor one does. The two aren't the same, and insurers may treat them differently.
People also assume this score is fixed once it's calculated. It isn't. It's recalculated periodically, so paying down debt or building a longer credit history can eventually show up in a better insurance score, even though it won't happen overnight.
Questions people ask about this
How do I find out my credit based insurance score?
You can ask your insurer directly, since they're required in most states to tell you if your score affected your rate. Some insurers will share the number or the range it falls in in upon request. A regular credit monitoring service won't show you this score, because it's a different calculation.
Will checking my own credit hurt my insurance rate?
No. Checking your own credit is a soft inquiry and doesn't affect your credit based insurance score. The score insurers use looks at your credit history and habits, not at how often you've checked your own report.
Can I get car insurance without a credit check?
In states that allow credit based scoring, most standard insurers will factor it in, but some companies market policies that don't consider credit at all. Ask any insurer directly whether they use credit in their pricing before you assume either way.
Does paying off debt lower my car insurance rate?
It can help over time, since your credit based insurance score is recalculated periodically and reflects your current credit file. It won't change your rate immediately, and the effect depends on what else is in your credit history.
Why did my car insurance go up if my driving record is clean?
A clean driving record is only one part of your rate. If you're in a state that allows credit based scoring, a change in your credit file could be part of it. Ask your insurer what changed, since they can tell you which factors moved your rate.
See whether a different insurer would weigh your situation differently.
Ask your current insurer or agent whether they use a credit based insurance score in your state, and whether it affected your last renewal. If you don't know what's in your credit file, request a copy of your credit report so you can see what an insurer might be looking at. Keep an eye on your renewal notice each year and ask what changed if your rate moves. If you're shopping around, ask each company the same question about credit scoring, since practices differ by insurer even within the same state.
