Does Credit Score Affect Car Insurance?
U.S. drivers with excellent credit pay $158 per month for full-coverage car insurance, which is less than drivers with poor credit, who pay $223 on average.
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Written byKatie Powers
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Katie PowersLicensed P&C Agent, Senior Insurance Editor
Licensed auto and home insurance agent
4+ years experience in insurance and personal finance editing
NPN: 20564519
Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.
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John LeachLicensed P&C Agent, Chief Copy Editor
Licensed property and casualty insurance agent
10+ years editing experience
NPN: 20461358
John is Insurify’s Chief Copy Editor, helping ensure the accuracy and readability of Insurify’s content. He’s a licensed agent specializing in home and car insurance topics.
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Reviewed byMark Friedlander
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Mark FriedlanderSenior Director, Media Relations, Insurance Information Institute
Media relations director for Insurance Information Institute
20+ years in insurance and communications
Impartial, independent expert
As Senior Director, Media Relations, for Insurance Information Institute, Mark serves as the non-profit’s national spokesperson, sharing information and education on a wide array of insurance issues.
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Table of contents
Quick Facts
Most states allow insurers to consider credit history when setting auto insurance rates. But California, Hawaii, Maryland, Michigan, Massachusetts, Oregon, and Utah restrict how and whether companies can use credit information.
Drivers with excellent credit usually qualify for lower insurance rates than people with poor credit.
Car insurance companies use credit-based insurance scores, which differ from FICO scores, to estimate how likely you are to file an insurance claim.
How credit score affects your car insurance rates
Your credit history is one of the important factors insurance companies consider when setting your car insurance rates, though some states don’t allow this practice. Auto insurers consider your credit-based insurance score rather than your credit score from FICO or VantageScore.[1]
Similar to how lenders use your credit score to determine how likely you are to repay a debt, car insurance companies use credit-based insurance scores to predict your likelihood of filing a claim. Insurance scores predict “loss relativity,” which tells insurance companies whether they’re likely to earn more on your premiums than they pay out on your claims.
The following table shows how your credit tier affects car insurance pricing.
Credit Tier  | Average Monthly Quote: Full Coverage |
|---|---|
| Excellent credit | $159 |
| Good credit | $166 |
| Poor credit | $223 |
Disclaimer: Table data is based on real-time quotes from Insurify’s network of 500+ insurance partners. Actual rates may vary depending on the policyholder’s individual profile and coverage needs.
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Cheapest car insurance rates by credit tier
Credit-based auto insurance scores don’t directly correspond to credit scores, but knowing what credit tier you fall into can help you predict how much your car insurance premiums might be.
Drivers with excellent credit typically qualify for low car insurance rates. Rates are still competitive for drivers with good credit, but people with poor credit often pay a premium.
Cheapest car insurance for drivers with poor credit
Because a poor credit history may indicate a greater likelihood of having an accident or filing a claim, insurers tend to charge higher premiums if you have bad credit and live in a state that allows them to do so.[2]
On average, drivers with poor credit pay $118 per month for liability-only policies and $223 per month for full coverage, according to Insurify data.
The following table shows average quotes from some of the cheapest companies for drivers with poor credit.
The below national rates are estimated rates current as of: Tuesday, April 14 at 12:00 PM PDT.
Insurance Company | Full Coverage | Liability Only |
|---|---|---|
| COUNTRY Financial | $104 | $48 |
| USAA | $125 | $60 |
| Auto-Owners | $151 | $78 |
| Mile Auto | $158 | $89 |
| Safeco | $168 | $103 |
| State Farm | $178 | $87 |
| GEICO | $181 | $97 |
| Allstate | $181 | $88 |
| American Family | $184 | $91 |
| Root | $191 | $111 |
| Mercury | $198 | $109 |
| Direct Auto | $202 | $111 |
| Elephant | $210 | $133 |
| Erie | $214 | $116 |
| Nationwide | $230 | $113 |
| Travelers | $236 | $117 |
| Liberty Mutual | $240 | $150 |
| CSAA | $252 | $171 |
| Bristol West | $252 | $125 |
| AssuranceAmerica | $253 | $142 |
| Plymouth Rock | $253 | $168 |
| The General | $258 | $103 |
| GAINSCO | $260 | $119 |
| Clearcover | $260 | $153 |
| Farmers | $263 | $128 |
| Anchor | $264 | $137 |
| Dairyland | $282 | $113 |
| Shelter | $293 | $159 |
| 21st Century | $309 | $157 |
| The Hartford | $337 | $183 |
| State Auto | $355 | $181 |
| Chubb | $437 | $224 |
| Amica | $547 | $298 |
Disclaimer: Table data sourced from real-time quotes from Insurify's 500+ partner insurance providers and quote estimates from Quadrant Information Services. Actual quotes may vary based on the policy buyer's unique driver profile.
Cheapest car insurance for drivers with good credit
A good credit score usually falls between 670 and 739. This range is near or slightly higher than the average credit score in the U.S., according to FICO.[3] If this applies to you, you’ll typically pay less for car insurance than someone with poor credit but a bit more than if you had excellent credit.
The following table shows average monthly quotes from top insurers for drivers with good credit.
The below national rates are estimated rates current as of: Tuesday, April 14 at 12:00 PM PDT.
Insurance Company | Full Coverage | Liability Only |
|---|---|---|
| COUNTRY Financial | $84 | $39 |
| Auto-Owners | $84 | $43 |
| USAA | $102 | $49 |
| State Farm | $107 | $52 |
| Erie | $120 | $65 |
| Mile Auto | $129 | $72 |
| Safeco | $132 | $81 |
| GEICO | $142 | $77 |
| Allstate | $149 | $72 |
| Root | $155 | $90 |
| American Family | $156 | $77 |
| Direct Auto | $159 | $87 |
| Mercury | $162 | $89 |
| Elephant | $165 | $104 |
| Nationwide | $186 | $92 |
| Travelers | $186 | $92 |
| CSAA | $198 | $135 |
| AssuranceAmerica | $199 | $112 |
| Plymouth Rock | $202 | $134 |
| The General | $203 | $81 |
| Bristol West | $204 | $102 |
| Liberty Mutual | $204 | $128 |
| GAINSCO | $205 | $94 |
| Clearcover | $207 | $122 |
| Anchor | $208 | $108 |
| Farmers | $215 | $105 |
| Chubb | $216 | $111 |
| Dairyland | $222 | $89 |
| Shelter | $229 | $124 |
| The Hartford | $243 | $132 |
| 21st Century | $250 | $127 |
| State Auto | $276 | $141 |
| Amica | $447 | $244 |
Disclaimer: Table data is based on real-time quotes from Insurify’s network of 500+ insurance partners. Actual rates may vary depending on the policyholder’s individual profile and coverage needs.
Cheapest car insurance for drivers with excellent credit
You’ll typically pay the lowest car insurance rates by credit tier if you have excellent credit. But several factors affect your insurance premium, so your credit information plays only a partial role. If you have excellent credit but a very poor driving record, you may face higher rates.
The average cost of car insurance for drivers with excellent credit is $159 per month for full coverage and $84 for liability coverage.
The table below shows the average rates top insurers offer to drivers with excellent credit.
The below national rates are estimated rates current as of: Tuesday, April 14 at 12:00 PM PDT.
Insurance Company | Full Coverage | Liability Only |
|---|---|---|
| Auto-Owners | $61 | $32 |
| COUNTRY Financial | $83 | $39 |
| State Farm | $87 | $42 |
| Erie | $88 | $48 |
| USAA | $91 | $44 |
| Mile Auto | $106 | $60 |
| GEICO | $116 | $62 |
| Safeco | $125 | $77 |
| Allstate | $128 | $62 |
| American Family | $134 | $66 |
| Mercury | $136 | $75 |
| Root | $142 | $82 |
| Direct Auto | $147 | $81 |
| Elephant | $157 | $99 |
| Liberty Mutual | $157 | $98 |
| Nationwide | $167 | $82 |
| Travelers | $167 | $83 |
| Plymouth Rock | $178 | $118 |
| AssuranceAmerica | $181 | $102 |
| Farmers | $182 | $89 |
| The General | $184 | $74 |
| GAINSCO | $186 | $85 |
| Bristol West | $186 | $92 |
| CSAA | $188 | $128 |
| Anchor | $188 | $98 |
| Chubb | $189 | $97 |
| Clearcover | $199 | $117 |
| Dairyland | $201 | $81 |
| Shelter | $212 | $115 |
| 21st Century | $231 | $118 |
| The Hartford | $238 | $129 |
| State Auto | $240 | $122 |
| Amica | $382 | $208 |
Disclaimer: Table data sourced from real-time quotes from Insurify's 500+ partner insurance providers and quote estimates from Quadrant Information Services. Actual quotes may vary based on the policy buyer's unique driver profile.
Why insurers consider your credit history
Insurers consider your credit history because consumer debt and insurance loss analysis show a direct correlation between how effectively a person manages debt and the likelihood that their policies will result in losses for the insurance company.
This doesn’t mean that a person with bad credit will definitely file more or larger claims. But it does mean the risk is higher than for someone with excellent credit.
Insurance scoring works in consumers’ favor most of the time, according to FICO.[4] The average American has “good” credit, and nearly half have very good or exceptional credit, which can earn them auto insurance discounts.
States that restrict or ban credit-based ratings
Laws in some states ban credit-based insurance ratings or restrict how insurance companies can use credit history. Learn about these state restrictions below.
California: Auto insurers can’t use information from your credit history to deny you an auto insurance policy or set your rates.
Hawaii: Car insurance companies can’t deny you coverage or set rates based on your credit rating.
Maryland: Auto insurance companies can’t charge more than a 40% surcharge based on your credit or use your credit history to increase your premium upon renewal.
Michigan: Car insurers may not use credit information or insurance scores to deny, cancel, or refuse to renew a policy.
Massachusetts: Auto insurers can’t use credit histories and insurance scores in decisions to issue or renew car insurance policies.
Oregon: Credit can’t be the only factor in a decision to initially refuse you coverage. Insurers can’t cancel or non-renew a policy based on credit or insurance score after 60 days.
Utah: Insurers can’t use credit alone to deny you a policy initially or to cancel or issue a non-renewal. Insurers also can’t base rates on credit.
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Average liability quotes for drivers with excellent credit start at $39/mo.
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How to improve your credit-based insurance score
The best way to improve your credit-based insurance score is to improve your credit. The following tips will help you increase your score and qualify for car insurance discounts and lower rates.
Watch your credit reports for errors
You can get free weekly reports from all three credit bureaus from AnnualCreditReport.com. Report errors to the bureaus that reported them.
Pay bills on time
Your payment history has an even bigger effect on your insurance score than on your credit score, so timely payments are key.
Keep your credit utilization low
Avoid using more than 30% of your credit limits. Experian suggests requesting credit limit increases or applying for a new credit card to reduce your utilization to below 10%.[5]
Avoid closing unused credit cards
Canceling cards can increase your utilization and reduce the average age of your accounts, which can hurt your credit.
Vary the types of credit you use
A varied credit mix that includes revolving credit (credit cards) and installment loans (personal loans and car loans) can help your score.
Remember that it takes time for your insurance score to reflect credit improvements. The rate reduction you see will vary by insurer.
Credit score and car insurance FAQs
In most states, credit can affect your car insurance premiums. Understanding how is the key to qualifying for the best rate on a policy.
Can you get car insurance without a good credit score?
Yes, you can typically get car insurance even if you don’t have a good credit score. But you’ll likely pay a higher premium if your state allows insurers to consider your credit-based insurance score.
Does comparing car insurance quotes affect your credit score?
No. Insurance quote comparisons use a soft inquiry on your credit report. It has no effect on your credit.
What credit score do you need for the best car insurance rates?
Drivers with excellent credit get the best rates. That equates to a FICO Score of 740 or higher (very good or exceptional) and a VantageScore of 661 or more (prime or superprime).[6]
How long does it take for credit improvements to lower your insurance rates?
That varies by insurer, but you might see a discount upon renewal. Consider comparing quotes from a few different insurance companies to make sure you’re getting a good rate.
What’s the difference between a credit score and a credit-based insurance score?
Credit scores predict the likelihood that you’ll repay debt on time. Credit-based insurance scores predict how likely you are to file auto insurance claims. Different organizations create and use these scores.
Will checking your credit hurt your car insurance rates?
No. Checking your own credit has no effect on your credit score or credit-based insurance score.
Methodology
Insurify data scientists analyzed more than 190 million quotes served to car insurance applicants in Insurify’s proprietary database to calculate the premium averages displayed on this page. These premiums are real quotes that come directly from Insurify’s 500+ partner insurance companies in all 50 states and Washington, D.C. Quote averages represent the median price for a quote across the given coverage level, driver subset, and geographic area.
Unless otherwise specified, quoted rates reflect the average cost for drivers between 20 and 70 years old with a clean driving record and average or better credit (a credit score of 600 or higher).
Liability-only premium averages correspond to policies with the following coverage limits:
- Bodily injury limits between state-minimum rates and $50,000 per person, $100,000 per accident
- Property damage limits between $10,000 and $50,000
- No additional coverage
- Comprehensive coverage with a $1,000 deductible
- Collision coverage with a $1,000 deductible
Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Services’ database of auto insurance rates.
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Sources
- Fair Isaac Corporation (FICO). "Credit Scores vs. Insurance Scores."
- Experian. "What Is the Difference Between Credit-Based Insurance Scores and Credit Scores?."
- Fair Isaac Corporation (FICO). "What is a Credit Score?."
- Fair Isaac Corporation (FICO). "Using Credit Data to Predict Insurance Loss."
- Experian. "What Is the Best Credit Utilization Ratio?."
- VantageScore. "The Complete Guide to Your VantageScore."
)
Katie PowersLicensed P&C Agent, Senior Insurance Editor
Licensed auto and home insurance agent
4+ years experience in insurance and personal finance editing
NPN: 20564519
Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.
Featured in
Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.
John LeachLicensed P&C Agent, Chief Copy Editor
Licensed property and casualty insurance agent
10+ years editing experience
NPN: 20461358
John is Insurify’s Chief Copy Editor, helping ensure the accuracy and readability of Insurify’s content. He’s a licensed agent specializing in home and car insurance topics.
Featured in
Mark FriedlanderSenior Director, Media Relations, Insurance Information Institute
Media relations director for Insurance Information Institute
20+ years in insurance and communications
Impartial, independent expert
As Senior Director, Media Relations, for Insurance Information Institute, Mark serves as the non-profit’s national spokesperson, sharing information and education on a wide array of insurance issues.