What to Know About a Credit-Based Insurance Score
A low credit-based insurance score can affect your car insurance rates more than a DUI in some cases.
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Updated · 6 min read
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Key takeaways
- A credit-based insurance score is one factor that most insurance companies use to determine your rates.
- A driver with a poor credit-based insurance score could pay an average of $1,602 more for car insurance than a comparable driver with a higher insurance score.
- Your credit-based insurance score is different from your regular credit score, but you can improve it in many of the same ways.
If your insurance rates have gotten more expensive despite a clean driving record, your credit-based insurance score may be to blame. Insurance companies use your credit-based insurance score, or insurance score, to predict how likely you may be to file a claim.
In most states, having a low credit-based insurance score usually means significantly higher car insurance rates.
It’s possible to improve your credit-based insurance score (and lower your car insurance rates) over time. But in the meantime, we recommend shopping around for car insurance from a few companies before you buy a policy to find the one with the best rates for your credit history.
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What is a credit-based insurance score?
Your credit-based insurance score is used to determine how likely you are to file a claim. It gives insurers an idea of how big of a risk you are to cover and helps them decide how much to charge you for coverage.
These credit-based insurance scoring models, created by data analytics companies like LexisNexis and FICO, have proved to be fairly accurate. A 2007 study — the latest data available — from the Federal Trade Commission showed that credit scores are an accurate indicator of whether someone will file an insurance claim .
In some cases, poor credit can increase your car insurance rates more than a recent DUI. In fact, rates for drivers with poor credit are 69% higher, on average, than for people with good credit, according to NerdWallet’s March 2026 analysis of the cost of car insurance.
Besides auto, a credit-based insurance score can be used to determine other types of coverage such as home and renters.
Although using credit-based insurance scores to calculate rates is legal on the federal level, insurance companies typically aren't allowed to use credit history as the sole reason for increasing rates or denying or canceling a policy. California, Hawaii and Massachusetts don't allow insurers to use credit when determining car insurance rates.
Credit-based insurance score vs. regular credit score
Your insurance credit score isn't the same as the more commonly known VantageScore or FICO credit score that’s used when you apply for a mortgage, credit card or auto loan. However, the factors used to determine your score are similar, but weighted differently. That’s because a credit score is meant to estimate the likelihood you’ll pay your debts, while the credit-based insurance score looks at how likely it is you'll file an insurance claim.
Because more than one company can issue a credit-based insurance score, your rating may differ from company to company. Regardless of the company, the higher your score, the better.
Factors used to create a credit-based insurance score are similar for LexisNexis and FICO but may differ when it comes to weighting. For example, below is a breakdown of how FICO weighs insurance credit scores, according to the Department of Insurance, Securities and Banking :
- Payment history (40%): How you made payments on your debt, including frequency and the amount paid off.
- Outstanding debt (30%)*: Amount of debt you have.
- Credit history length (15%): Amount of time you have had a line of credit.
- Pursuit of new credit (10%): Looks at whether you have recently applied for new lines of credit.
- Credit mix (5%): The kinds of credit you have, including credit cards, mortgage or auto loans.
Based on the categories above, the following could negatively affect your insurance credit score:
- Missing payments.
- Having little to no credit history.
- Too many hard credit inquiries. (A hard credit pull occurs when you apply for an auto, student or personal loan, mortgage or credit card.)
- High credit card balances as compared with your credit limits, known as your credit utilization.
Like with a regular credit score, personal information cannot be used to determine your credit-based insurance score, including:
- Gender.
- Race.
- Marital status.
- Religion.
- Age.
- Income and occupation.
- Location of residence.
Although your credit score and credit-based insurance score aren't the same, your credit score can be a good indicator of your credit-based insurance score. If you have a decent credit score, your credit-based insurance score is likely (but not always) on par.
» MORE: Get your free credit score
*FICO declined to elaborate on whether this includes credit utilization only or all debt.
What’s a 'good' insurance credit score?
It’s hard to say what a "good" credit-based insurance score is because each company can decide what score it defines as "good."
For instance, one insurance company might decide a score of 750 or better unlocks the lowest car insurance rates, while another might instead require a score of 700 or better to receive its best price. And because scores come from different credit-reporting companies, those numbers won’t always be measured on the same scale.
To give you an idea of the ranges, LexisNexis offers credit-based insurance scores through credit bureau Experian from 200 to 997, while a TransUnion credit-based insurance score ranges from 300 to 900.
Average car insurance rates for poor credit
The average cost of car insurance for someone with poor credit is:
- $3,926 per year for full coverage.
- $1,008 per year for minimum coverage.
Comparatively, the average car insurance rates for a good driver with good credit are $1,602 less per year for full coverage, or $2,324, and $382 less per year for minimum coverage, or $626.
Do all auto insurers use credit-based insurance scores?
The use of credit to determine insurance rates has come under scrutiny for several reasons . Critics say it's unfair to price auto insurance based on credit score because it can’t predict a driver's accident risk. There’s also a lack of awareness about the use of credit-based insurance scores to set insurance rates, and consumer advocates have pushed back on the use of credit information to set rates.
Some companies are starting to forgo credit checks. Root Insurance has pledged to remove credit scores from its pricing model, while drivers in Texas can get a no-credit-check car insurance quote from Dillo.
Still, about 95% of auto insurers use an insurance credit score to determine car insurance rates, according to FICO, so depending on where you live, you might have no choice. But that doesn't mean you’re stuck with the rate you’re paying now. Shopping around for car insurance quotes can help you find lower rates, even if you have poor credit.
What company has the best rates for good drivers with poor credit?
Out of the largest auto insurers in the U.S. that provide rate information, Travelers, on average, has the best rates for good drivers with poor credit. (Our "good driver" profile is a 35-year-old with no moving violations and credit in the "good" tier.)
These rates are for full coverage policies, which include liability, comprehensive, collision, uninsured/underinsured motorist protection and any additional state-mandated coverage.
Why you can trust NerdWallet
Our writers and editors follow strict editorial guidelines to ensure fairness and accuracy in our writing and data analyses. You can trust the prices we show you because our data analysts take rigorous measures to eliminate outliers and inaccuracies in pricing data, which include rates from every ZIP code in the country where coverage is offered and data is available. When comparing rates for different coverage amounts, ages and backgrounds, we change only one variable at a time, so you can easily see how each factor affects pricing. Read our methodology.
Here are the annual car insurance rates for good drivers with good or poor credit, averaged across all states:
| Company | Good credit | Poor credit |
|---|---|---|
| Allstate | $3,186 | $4,717 |
| American Family | $2,676 | $4,053 |
| Farmers | $4,007 | $7,523 |
| GEICO | $2,052 | $2,881 |
| Nationwide | $2,794 | $4,192 |
| Progressive | $2,057 | $3,216 |
| State Farm | $2,123 | $8,288 |
| Travelers | $1,665 | $2,862 |
| USAA* | $1,560 | $2,832 |
*USAA is only available to military, veterans and their families.
See what you could save on car insurance
Easily compare personalized rates to see how much switching car insurance could save you.
Car insurance rates for drivers with good or poor credit by state
| State | Rate for drivers with good credit | Rate for drivers with poor credit |
|---|---|---|
| Alabama | $2,196 | $3,924 |
| Alaska | $1,856 | $2,924 |
| Arizona | $2,819 | $4,350 |
| Arkansas | $2,687 | $4,167 |
| California | $1,892* | $1,892* |
| Colorado | $3,216 | $5,380 |
| Connecticut | $2,784 | $4,596 |
| Delaware | $2,647 | $4,847 |
| Florida | $4,069 | $6,818 |
| Georgia | $3,269 | $5,770 |
| Hawaii | $1,998* | $1,998* |
| Idaho | $1,832 | $2,662 |
| Illinois | $2,458 | $3,911 |
| Indiana | $1,926 | $3,499 |
| Iowa | $2,179 | $3,720 |
| Kansas | $2,530 | $4,300 |
| Kentucky | $3,095 | $6,227 |
| Louisiana | $4,481 | $8,951 |
| Maine | $1,649 | $2,645 |
| Maryland | $3,085 | $5,280 |
| Massachusetts | $1,851* | $1,851* |
| Michigan | $3,138 | $6,617 |
| Minnesota | $2,514 | $4,220 |
| Mississippi | $2,580 | $4,025 |
| Missouri | $2,714 | $4,332 |
| Montana | $2,794 | $4,606 |
| Nebraska | $2,110 | $3,460 |
| Nevada | $2,836 | $4,589 |
| New Hampshire | $1,555 | $2,662 |
| New Jersey | $3,835 | $7,816 |
| New Mexico | $2,255 | $4,069 |
| New York | $2,619 | $4,302 |
| North Carolina | $1,793 | $2,453 |
| North Dakota | $2,234 | $3,964 |
| Ohio | $1,743 | $3,109 |
| Oklahoma | $2,528 | $3,435 |
| Oregon | $2,131 | $3,648 |
| Pennsylvania | $2,261 | $4,067 |
| Rhode Island | $2,675 | $4,863 |
| South Carolina | $2,508 | $4,458 |
| South Dakota | $2,177 | $3,969 |
| Tennessee | $2,269 | $4,538 |
| Texas | $3,297 | $5,639 |
| Utah | $2,283 | $4,165 |
| Vermont | $1,503 | $2,611 |
| Virginia | $2,038 | $3,557 |
| Washington | $2,320 | $3,195 |
| Washington, D.C. | $2,533 | $4,900 |
| West Virginia | $2,074 | $3,632 |
| Wisconsin | $2,311 | $3,912 |
| Wyoming | $1,148 | $2,870 |
*Credit is not used to price rates in this state.
How to build your credit and get cheaper insurance
Here are a few tips to build credit:
Pay your bills on time. Although it isn’t always easy, having a history of on-time payments is one of the best ways to help your credit.
Pay off your credit card debts. Do your best to pay off any credit card debt as soon as you can without going over budget.
Pay down credit card balances. There are times when you might have to use your credit card to pay for essentials. Still, try to keep your balances as low as possible — NerdWallet recommends staying under 10% of your total credit limit.
Limit hard credit inquiries. Hard credit pulls, like those used to determine whether you qualify for a loan or credit card, may temporarily lower your credit scores. Try to leave at least six months between applications.
Find out your credit-based insurance score. Contact the company that created your score to find out why you received it. While it’s not as easy to obtain your credit-based insurance score as your other credit scores, it’s still possible. Some insurers will provide contact information to find out more about your score, especially if your car insurance rate was affected by your credit.
Get a copy of your credit report. If you’re having trouble finding your credit-based insurance score, get a copy of your credit report. The Fair Credit Reporting Act allows you to obtain a free credit report every 12 months from three consumer credit reporting companies: Equifax, Experian and TransUnion . NerdWallet can provide your free TransUnion credit report; get your Experian and Equifax report at AnnualCreditReport.com.
Your report includes your:
- Identification data.
- Payment record.
- Accounts opened.
- Age of accounts.
- Recent hard credit inquiries.
- Medical debt and revolving credit.
- Balances.
- Credit limits.
- Personal details such as your job and address.
You can use this data to see what factors might be affecting your credit score. Because credit-based insurance scores and credit scores use the same information in different proportions, any of these actions will affect both scores:
Ask to be added as an authorized user. If you’re close with someone who has a lightly used, established credit card account, preferably with a generous credit limit, ask them to add you as an authorized user. Being added to their card may help build your credit.
Know your rights. State laws differ in regard to using credit to set insurance rates. Contact your state’s department of insurance to find out the rules.
See what you could save on car insurance
Easily compare personalized rates to see how much switching car insurance could save you.
Other ways to save on car insurance if you have poor credit
Elevating your insurance credit score will likely lower your insurance rates if you have poor credit, but there are other ways to find savings.
Shop around. Compare auto insurance rates to find the cheapest auto insurer. You may be able to find a better price than you’re paying now, even if you have poor credit, because every company weighs factors differently. Although one company may hike your rate by 10% for poor credit, another might bump it by 5%.
Having poor credit affects insurance rates, but shopping around won’t affect your credit score because there’s no hard credit pull when you compare car insurance quotes.
Your insurance credit score is especially important when you’re getting a policy with a company for the first time. When you’re a new customer, most companies will check your score to help calculate car insurance rates. However, after your initial policy, companies vary on when they check your score, says P.J. Smith, senior director of product management at LexisNexis Risk Solutions.
Some auto insurers look at your credit-based insurance score every time you renew your policy, while others will check it only occasionally. How often your insurance credit score needs to be checked also depends on state regulations.
This means you can’t assume you’re getting the best rate just because your credit is good. Shop around to make sure you’re getting the cheapest price. Young adults, immigrants new to the country and anyone who doesn’t have a credit history can especially benefit from comparing car insurance rates.
Usage-based insurance. If you’re a good driver, you might get cheaper car insurance rates by using usage-based insurance. These policies still use factors like location and age, but they also use driving behavior to determine your car insurance rate. Driving habits like speeding and hard braking are generally gathered through a plug-in device or smartphone app. Root specializes in usage-based insurance, and some traditional insurers like Progressive also offer this option.
Pay-per-mile insurance. Unlike traditional insurance, premiums for this type of policy depend on how many miles you drive each month. This is usually calculated by a plug-in device or smartphone app. If you work from home or don’t drive a lot, this could cost less than traditional insurance. Some large insurers, such as Nationwide, offer a per-mile option.
Request a LexisNexis report. Your insurance credit score is only one factor that is used to determine your car insurance rate. Driving record and insurance history also play a big part.
Insurers get your driving and insurance history from your Comprehensive Loss Underwriting Exchange, or CLUE, auto report. CLUE is a collection of data LexisNexis sells to auto insurers to help them approve clients and set premiums. You can request a “full file disclosure” for free on its website, which includes copies of several reports that LexisNexis compiles about you such as your CLUE auto and property reports. (Here’s an example of what your CLUE auto report might look like and some tips on how to read it.)
Frequently Asked Questions
Does getting insurance quotes affect your credit score?
No, there is no hard credit pull when you get a car insurance quote, so shopping around won’t affect your credit score. A hard credit pull generally happens when you apply for credit, such as a mortgage or credit card.
Is an insurance score the same as a credit score?
A credit-based insurance score and regular credit score are different, although both look at similar factors, like your payment history. Insurers use insurance credit scores to predict how likely it is you’ll file a claim, with a poor score typically translating to higher insurance rates.
What is a good credit-based insurance score?
There isn’t a straightforward answer. Each insurer decides what a “good” credit-based insurance score is, so numbers can vary. However, your regular credit score can often give you an idea of how “good” your insurance score is.
Article sources
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editorial guidelines.
- 1. Federal Trade Commission. CREDIT-BASED INSURANCE SCORES: IMPACTS ON CONSUMERS OF AUTOMOBILE INSURANCE . Accessed Mar 13, 2026.
- 2. Department of Insurance, Securities and Banking. How an Insurance Company Can Use Your Credit Score to Determine Your Premium. Accessed Mar 13, 2026.
- 3. National Association of Insurance Commisioners. Review of the Use of Credit-Based Insurance Scoring By Insurers. Accessed Mar 13, 2026.
- 4. Federal Trade Commission. A Summary of Your Rights Under the Fair Credit Reporting Act. Accessed Mar 13, 2026.
Methodology
NerdWallet averaged rates based on public filings obtained by pricing analytics company Quadrant Information Services. We examined rates for 35-year-old men and women for all ZIP codes in all 50 states and Washington, D.C. Although it’s one of the largest insurers in the country, Liberty Mutual is not included in our rates analysis due to a lack of publicly available information.
In our analysis, “good drivers” had no moving violations on record; a “good driving” discount was included for this profile. Our “good” and “poor” credit rates are based on credit score approximations and do not account for proprietary scoring criteria used by insurance providers. These are average rates, and your rate will vary based on your personal details, state and insurance provider.
Sample drivers had the minimum required coverage by law in each state. Some policies include additional coverage at the insurer’s discretion.
We used a 2020 Toyota Camry L for all drivers and assumed 12,000 annual miles driven.
We changed the credit tier from “good” to “poor” as reported to the insurer to see rates for drivers with poor credit.
On this page
- Key takeaways
- What is a credit-based insurance score?
- Credit-based insurance score vs. regular credit score
- What’s a 'good' insurance credit score?
- Average car insurance rates for poor credit
- Do all auto insurers use credit-based insurance scores?
- What company has the best rates for good drivers with poor credit?
- Car insurance rates for drivers with good or poor credit by state
- How to build your credit and get cheaper insurance
- Other ways to save on car insurance if you have poor credit
