In most states, insurers use a credit-based insurance score to help predict how likely you are to file a claim. A higher score usually means a lower premium.
Why insurers use credit
Studies have linked credit history to claim frequency, so insurers treat it as a risk signal. It is separate from your regular FICO score but uses similar data: payment history, debt, and length of credit history.
How much it matters
- Drivers with poor credit can pay 50-100% more than drivers with excellent credit for the same coverage.
- A few states (California, Hawaii, Massachusetts, Michigan) restrict or ban its use.
How to improve your insurance score
- Pay every bill on time.
- Keep credit-card balances low relative to limits.
- Avoid opening several new accounts at once.
- Check your credit report for errors and dispute them.