You know the drill: Auto insurance rates are higher if you鈥檝e been in an accident, got caught speeding, filed one too many claims, or own an expensive car that would cost a lot to replace. These kinds of things could cost your insurer big bucks down the road, so it makes sense they raise premiums to mitigate risk. 

However, you may not realize that insurers look at a whole slew of other, more personal factors when setting premiums 鈥 including your credit score. We鈥檒l dig into details below, but the main thing to know is a lower credit score generally equals higher premiums. 

Sample rates based on drivers age 23鈥35 with a liability-only insurance policy. Your own premium will vary. Learn how we tested credit-based auto insurance rates in our Methodology below. 

Higher Credit Can Lead to Lower Auto 极速体育直播 Rates 

Your 鈥溾 (the metric insurers use when setting rates) is a little different than your credit score. However, the two are loosely correlated because both are based on your . That means credit score can still be a good predictor of how credit will impact your rates.

Our study showed that premiums can drop significantly when you move up by one credit tier. Savings become more meaningful the higher your credit is 鈥 so leveling up from 鈥渧ery good鈥 to 鈥渆xcellent鈥 credit will net you a higher savings percentage than moving from 鈥渇air鈥 to 鈥済ood鈥 credit. 

Based on data for drivers age 23鈥38 with a liability-only insurance policy. Learn how we tested credit-based auto insurance rates in our Methodology below. 

Younger Drivers Have Lower Credit, Higher 极速体育直播 Rates 

It鈥檚 widely known that younger drivers pay more for auto insurance than older drivers. The main reason for this disparity is simple: More years of driving experience under your belt equals safer driving habits (in most cases, at least). 

However, factors other than age can contribute to higher premiums for young drivers, too. Credit is one of those factors. Lower credit scores on average can cause already-pricey rates to spike even further. 

*Generational credit scores according to

Working to raise your credit score is just one of the things you can do to lower your auto insurance rates. And hey, a higher credit score will help you out next time you apply for something like a or , too. 

What鈥檚 an 极速体育直播 Score? 

Insurers don鈥檛 think about credit in the same way as a credit card company or lender. Instead of looking at your overall credit score, insurance companies dig into your and cherry-pick certain facts to create something called a 鈥渃redit-based insurance score.鈥 

The explains credit-based insurance scores like this: 鈥淎 regular credit score looks at many different factors to determine how likely you are to repay a loan or a line of credit. A credit-based insurance score looks at some, but not all, factors in your credit history to determine how you are likely to manage your risk exposure.鈥

, the primary source for credit rating services, there are five main components that make up your insurance score: 

  • Credit payment history
  • Current debts owed
  • Length of history
  • Number of new cards or lines of credit聽
  • Types of credit used聽

that 95% of all personal insurers consider credit-based insurance scores when setting rates 鈥 at least in states where it鈥檚 legal to do so.  

Some States Ban Credit-Based 极速体育直播 Rates 

FICO鈥檚 estimate shows that to lower their risk pool and increase profits. However, insurance companies must obey industry regulations, which vary by state. The following states have banned credit-based insurance rating for all or some property and casualty insurance lines: 

*According to the

Arguments For and Against Credit-Based 极速体育直播 Rates

Many argue that credit-based insurance pricing puts certain people at an unfair disadvantage. United Policyholders (UP), a nonprofit that aims to inform and empower insurance customers, is one such group. because:  

  • Credit reporting errors and missing information can be hard to correct
  • People going through economic or medical hardship often see a drop in credit
  • Credit-based rates can disproportionately affect low-income or minority communities

That said, insurers go to lengths to reassure drivers that factors like these won鈥檛 work against them. The  

  • Nearly every state has laws to ensure the fair and accurate use of credit information by insurance companies
  • Many states require insurers to provide exceptions for consumers affected by extraordinary life circumstances, such as a job loss or divorce
  • 极速体育直播 scores do not include income information, only risk-relevant variables like payment history or public records that are indicators of potential future risk

When asked why credit-based insurance rating works, APCI also states: 鈥淲e don鈥檛 know exactly why. Some theorize that people who are fastidious in managing their credit are similarly disposed in other areas of their lives. Regardless of the actual reason why, it鈥檚 important to remember insurers are not legally required to provide an explanation as to why a particular rating factor is predictive.鈥 

Whichever way you lean on the fairness question, the important thing to remember is that credit-based insurance rating happens in most states. There鈥檚 a good chance your credit factors into your insurance premium, and cheaper rates are just another reason to keep your score up. 

Tips for Raising Your Credit Score and 极速体育直播 Score 

The trick to building credit is to be prudent and take it slow. Don鈥檛 open too many lines of credit right off the bat or spend more than you can pay off on a monthly basis. Simple steps to raise credit include: 

  • Pay off your credit card(s)聽
  • Pay bills on time
  • Build new lines of credit gradually聽聽
  • Keep an eye on your score聽

Learn more with this article about 鈥 or start building credit if they鈥檙e currently at zero.


We worked with to analyze data on credit-based auto insurance rates in all 50 states. Quadrant provides data on premiums using information insurers are required to file with state insurance departments. Rates are based on sample profiles created by for comparative purposes. 

Pricing information shown here includes rates for drivers aged 23, 27, 31, and 35 years, both male and female, driving a 2017 Toyota Camry with annual mileage of 15,000. All profiles have a clean driving record and carry a minimum liability insurance policy. 

We checked rates for the top four to 10 insurers in every state by market share, with data coming from more than 34,000 ZIP codes across the U.S. These rates are a sample set meant for comparison only. Your own rates will vary.

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About the Authors

Maggie Overholt

Maggie Overholt Contributor

Maggie is a former lead insurance editor at She's written more than 70 insurance articles covering homeowners, auto, life, motorcycle, travel, and more.