What a credit-based insurance score is
A credit-based insurance score combines factors such as payment history, outstanding debt, length of credit history, and types of credit. It does not include income, race, or marital status. Insurers use it alongside driving record, vehicle, and location to price policies.
How much it can move premium
Drivers with poor credit can pay double what drivers with excellent credit pay for the same coverage. The exact impact varies by state and carrier — California, Hawaii, Massachusetts, and Michigan restrict or prohibit the use of credit in auto rating.
How to improve your insurance score
The same habits that build a good FICO score help here: pay on time, keep credit card balances well below limits, and avoid opening many new accounts at once. Improvements typically show up at your next renewal.
Key takeaways
- Most states allow credit-based insurance scoring for auto policies.
- Poor credit can double premiums versus excellent credit.
- A handful of states restrict or prohibit the practice.
- Improving credit at renewal time can produce real premium savings.
This article is for general educational purposes and is not legal, financial, or insurance advice. Consult a licensed professional for decisions specific to your situation.