How can I monitor my credit score?

There are many different potential routes for keeping an eye on your credit score. You can purchase your credit score from each of the major credit bureaus or directly through FICO. However, there are also free resources for credit monitoring. This is an available option from several banks and credit card companies, as well as third-party services. You may want to double-check that a credit monitoring service is reputable before inputting personal information. Learn more: How to check my credit score

Does getting a car insurance quote impact my credit score?

While insurance companies in authorized states can access your credit history anytime you get a quote from a new company, it should not impact your credit score. Insurance providers rely on soft credit checks to calculate your credit-based insurance score. A soft inquiry may appear on your credit report but should not affect your score.

How can I improve my credit-based insurance score?

Keep in mind that credit-based insurance scores are not the same as your credit score. That said, improving your credit score will also likely improve your insurance score. Paying your bills on time and avoiding hard inquiries might improve both your credit score and your credit-based insurance score, which could possibly lead to lower premiums.

Do you have to have a good credit score to get insurance?

Even drivers with poor credit typically have options for car insurance. However, some companies may not extend coverage to drivers with poor credit, and they usually pay higher premiums. Some carriers consider drivers with poor credit to be high-risk, so you may need to do a little more research to find a carrier that will offer you coverage.

What other factors affect my car insurance rates?

Car insurance companies consider more than a dozen rating factors when calculating your premium. Although your credit score can significantly impact your rate, some other rating factors include the make and model of your vehicle, your driving record and how you use your car. Additionally, most states allow car insurance companies to use your gender, age, and ZIP code to generate your premium.

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Car insurance rates by credit score

Written by

Cate Deventer

Edited by

Amelia Buckley

Reviewed by

Mark Friedlander

Updated May 10, 2023

At Bankrate, we strive to help you make smarter financial decisions. To help readers understand how insurance affects their finances, we have licensed insurance professionals on staff who have spent a combined 47 years in the auto, home and life insurance industries. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation of . Our content is backed by Coverage.com, LLC, a licensed entity (NPN: 19966249). For more information, please see our .

The Bankrate promise

At Bankrate, we strive to help you make smarter financial decisions. To help readers understand how insurance affects their finances, we have licensed insurance professionals on staff who have spent a combined 47 years in the auto, home and life insurance industries. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation of . Our content is backed by Coverage.com, LLC, a licensed entity (NPN: 19966249). For more information, please see our .

On This Page

In most states, drivers with credit in good standing generally pay much less for car insurance than drivers with a poor credit history. According to 2023 rate data from Quadrant Information Services, drivers with excellent credit pay an average of $1,764 per year for full coverage car insurance. In comparison, drivers who fall into the poor credit category pay an average of $3,479 per year for the same coverage level — an average of 97 percent more. Bankrate is here to help you understand how credit can impact car insurance rates and potentially lower your premium by removing credit score roadblocks.

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What to know first

On average, drivers with poor credit pay 97 percent more for full coverage car insurance than those with excellent credit.
California, Hawaii, Massachusetts and Michigan prohibit or limit the use of credit as a rating factor in determining auto insurance rates.
Drivers with poor credit in New York pay the highest average rate for full coverage car insurance at $7,186 per year.

Does your credit tier impact your car insurance premium?

Credit history is used in nearly every state as a car insurance rating factor. Statistically, drivers with lower credit scores are more likely to file a claim, as actuarial studies show that how a person manages their financial affairs is a good predictor of filing an insurance claim, according to the Insurance Information Institute (Triple-I). Because the risk of paying a claim is greater, car insurance companies typically charge higher premiums for drivers with lower credit-based insurance scores.

National average annual full coverage premium by credit rating

Poor credit	Average credit	Good credit	Excellent credit
$3,479	$2,176	$2,014	$1,764

Why does your credit score affect car insurance rates?

When evaluating your credit history, insurance companies use what is called a credit-based insurance score. This score evaluates particular aspects of a consumer’s credit history to determine how likely they may be to have an insurance loss. While each insurer has its own proprietary underwriting system for calculating an insurance-based credit score, common factors that usually factor into this score include:

Outstanding debt: This is the amount of debt you currently have.
Credit history length: This shows how long you have had an open line of credit.
Credit mix: This reflects different lines of credit, such as auto loans and credit cards.
Payment history: This shows how well you have managed to pay your debts over time.
Pursuit of new credit: This shows recent attempts to open new lines of credit.

How credit score impacts insurance premiums by state

Most states allow insurance companies to use credit as a rating factor when pricing policies. The use of credit history, along with other rating factors and geographic factors such as traffic patterns, regional weather trends, population density and cost of living, cause average car insurance rates to vary significantly between states.

The table below shows the average full coverage premium in different states and Washington, D.C., sorted by credit tier. California, Hawaii, Massachusetts and Michigan prohibit or restrict the use of credit as a rating factor for car insurance policies.

Annual full coverage premium by state and credit rating

	Poor	Average	Good	Excellent
Alabama	$3,270	$1,986	$1,843	$1,614
Alaska	$2,697	$2,054	$1,946	$1,771
Arizona	$3,258	$1,980	$1,810	$1,584
Arkansas	$3,849	$2,113	$1,907	$1,610
California*	$2,291	$2,291	$2,291	$2,291
Colorado	$3,535	$2,304	$2,121	$1,756
Connecticut	$2,900	$1,720	$1,553	$1,261
Delaware	$3,522	$2,293	$2,103	$1,773
Florida	$6,378	$3,607	$3,183	$2,673
Georgia	$3,330	$2,229	$2,085	$1,843
Hawaii*	$1,275	$1,275	$1,275	$1,275
Idaho	$1,868	$1,218	$1,133	$1,016
Illinois	$2,874	$1,930	$1,806	$1,550
Indiana	$2,095	$1,394	$1,295	$1,125
Iowa	$2,343	$1,459	$1,315	$1,135
Kansas	$3,124	$2,024	$1,878	$1,638
Kentucky	$3,911	$2,349	$2,124	$1,807
Louisiana	$5,532	$3,200	$2,909	$2,470
Maine	$1,640	$1,019	$941	$842
Maryland	$3,206	$2,139	$1,971	$1,700
Massachusetts*	$1,262	$1,262	$1,262	$1,262
Michigan*	$6,870	$3,027	$2,691	$2,073
Minnesota	$3,287	$1,922	$1,760	$1,520
Mississippi	$3,232	$1,936	$1,771	$1,544
Missouri	$3,145	$2,085	$1,943	$1,637
Montana	$3,002	$1,988	$1,889	$1,655
Nebraska	$3,037	$1,795	$1,624	$1,376
Nevada	$4,027	$2,945	$2,779	$2,480
New Hampshire	$2,337	$1,407	$1,262	$1,021
New Jersey	$3,211	$1,932	$1,754	$1,376
New Mexico	$2,582	$1,679	$1,591	$1,410
New York	$7,186	$3,497	$3,139	$2,581
North Carolina	$1,813	$1,495	$1,446	$1,391
North Dakota	$2,445	$1,461	$1,302	$1,089
Ohio	$2,229	$1,375	$1,266	$1,065
Oklahoma	$3,571	$2,171	$1,998	$1,748
Oregon	$2,375	$1,541	$1,415	$1,241
Pennsylvania	$2,915	$2,155	$2,040	$1,856
Rhode Island	$3,085	$2,139	$1,886	$1,687
South Carolina	$2,950	$1,675	$1,532	$1,251
South Dakota	$3,288	$1,730	$1,553	$1,270
Tennessee	$2,761	$1,601	$1,429	$1,231
Texas	$3,304	$2,224	$2,019	$1,752
Utah	$2,661	$1,644	$1,510	$1,277
Vermont	$1,822	$1,166	$1,061	$949
Virginia	$2,533	$1,565	$1,439	$1,195
Washington	$1,468	$1,419	$1,410	$1,393
Washington, D.C.	$3,337	$2,241	$2,072	$1,861
West Virginia	$2,688	$1,733	$1,580	$1,348
Wisconsin	$5,631	$1,442	$1,292	$1,076
Wyoming	$2,583	$1,693	$1,582	$1,323

*These states prohibit or limit the use of credit as a rating factor.

What can I do to improve my credit score?

Your credit score is likely an important part of your overall financial health. A high credit score may help you get approved for loans, qualify for lower interest rates or get a higher credit limit. If your credit score is not the best, there are ways that you may be able to improve it. Although it may take time, learning how to build credit and improving your credit score might help you to lower your car insurance premiums. If you are unable to find an affordable rate with a standard insurance provider, you might consider exploring quotes from a no credit check insurance company if one is available in your state. Additionally, the following steps may help you improve your credit score.

Pay your bills on time

One aspect of a credit-based insurance score is your payment history. If you have a history of overdue bills and credit delinquencies, this could be an indication to companies that you do not manage your money well, which means you may not have the funds available to pay for small damages out of pocket. That, in turn, may lead to you filing more claims. Consistently paying your bills by the due date might help to increase your overall credit and insurance scores.

Keep hard credit inquiries to a minimum

Credit inquiries come in two forms: hard checks and soft checks. Whenever you apply for a line of credit, the company considering you as a customer will pull your credit report, which constitutes a hard inquiry and does affect your score. When insurance companies review your credit in the quoting process, that is considered a soft inquiry and shouldn’t have an impact on your actual credit tier. Too many hard inquiries can have a negative impact on your score. If you are trying to build your credit, you may want to consider waiting to apply for a loan or line of credit.

Monitor your score regularly

Monitoring your credit score may be beneficial in several ways. When you know your score, you may be able to more easily take steps to improve it. Regular reviews of your credit reports may also help you to identify inaccuracies or fraudulent activity. If you see anything suspicious, you might be able to take steps to dispute it.

Maintain old lines of credit

The simple act of keeping old credit card accounts open may help improve your credit score and credit-based insurance score. Length of credit history is worth between 15 and 20 percent of your credit score. Instead of canceling an unused credit card, you could consider keeping the utilization of the card low and making small on-time payments to help boost your credit score.

Be aware of your credit utilization ratio

In addition to the number of lines of credit you have, your credit utilization ratio will also impact your credit rating. Your credit utilization ratio is a measurement of how much credit you have available compared to how much you use. Although there is no set rule of how much of your credit you should be using, many finance professionals recommend that you utilize no more than 30 percent of your total available credit at any given time. If you are using more than 30 percent of your available credit, paying off some of your debt to bring your credit utilization score down may help improve your credit score and, in turn, your credit-based insurance score.

Frequently asked questions

There are many different potential routes for keeping an eye on your credit score. You can purchase your credit score from each of the major credit bureaus or directly through FICO. However, there are also free resources for credit monitoring. This is an available option from several banks and credit card companies, as well as third-party services. You may want to double-check that a credit monitoring service is reputable before inputting personal information.

Learn more: How to check my credit score
While insurance companies in authorized states can access your credit history anytime you get a quote from a new company, it should not impact your credit score. Insurance providers rely on soft credit checks to calculate your credit-based insurance score. A soft inquiry may appear on your credit report but should not affect your score.
Keep in mind that credit-based insurance scores are not the same as your credit score. That said, improving your credit score will also likely improve your insurance score. Paying your bills on time and avoiding hard inquiries might improve both your credit score and your credit-based insurance score, which could possibly lead to lower premiums.
Even drivers with poor credit typically have options for car insurance. However, some companies may not extend coverage to drivers with poor credit, and they usually pay higher premiums. Some carriers consider drivers with poor credit to be high-risk, so you may need to do a little more research to find a carrier that will offer you coverage.
Car insurance companies consider more than a dozen rating factors when calculating your premium. Although your credit score can significantly impact your rate, some other rating factors include the make and model of your vehicle, your driving record and how you use your car. Additionally, most states allow car insurance companies to use your gender, age, and ZIP code to generate your premium.

Methodology

Bankrate utilizes Quadrant Information Services to analyze 2023 rates for ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:

$100,000 bodily injury liability per person
$300,000 bodily injury liability per accident
$50,000 property damage liability per accident
$100,000 uninsured motorist bodily injury per person
$300,000 uninsured motorist bodily injury per accident
$500 collision deductible
$500 comprehensive deductible

Our base profile drivers own a 2021 Toyota Camry, commute five days a week and drive 12,000 miles annually.

These are sample rates and should only be used for comparative purposes.

Credit-based insurance scores: Rates were calculated based on the following insurance credit tiers assigned to our drivers: “poor, average, good (base) and excellent.” Insurance credit tiers factor in your official credit scores but are not dependent on that variable alone. Four states prohibit or limit the use of credit as a rating factor in determining auto insurance rates: California, Hawaii, Massachusetts and Michigan.

Written by

Cate Deventer

Former Writer & Editor, Insurance