Your credit history can impact how much you pay for insurance. Many of the same factors that determine your credit score are used to calculate your insurance score, a three-digit number providers use to predict the likelihood that you'll file a claim.
Here's what you need to know about your credit-based insurance scores, including how they're calculated, how they're used and how to improve yours to get a better rate.
What we'll cover
- What is an insurance score?
- How your insurance score is calculated
- What's a good insurance score?
- Can I see my insurance score?
- How to raise your insurance score
- FAQs
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What is an insurance score?
Actuarial studies suggest that how people manage their finances is a good indicator of how likely they are to file an insurance claim. So, in most states, insurance companies analyze your credit history to come up with your insurance score. (California, Hawaii, Maryland, Massachusetts, Michigan, Nevada, Oregon and Utah prohibit or greatly restrict insurers from using credit-based insurance scores.)
The actual number varies depending on which agency is providing data: TransUnion, for example, uses insurance scores that range from 300 to 900. The LexisNexis Risk Classifier, meanwhile, assigns a range of between 200 and 997.
People with lower scores are typically charged higher premiums. Both Progressive and State Farm have lower-than-average auto insurance rates for people with poor insurance scores.
Progressive Auto Insurance
Cost
The best way to estimate your costs is to request a quote
App available
Yes
Policy highlights
Progressive offers a number of lines of insurance to allow for bundling, and convenient tools to help you keep your coverage in your budget.
Terms apply.
Read our Progressive Auto Insurance review.
State Farm Auto Insurance
Cost
The best way to estimate your costs is to request a quote
App available
Yes
Policy highlights
State farm is one of the largest auto insurers based on market share and has an excellent reputation for customer satisfaction. It offers 13 discounts, including ones for safe driving and young drivers.
Terms apply.
Read our State Farm Auto Insurance review.
How your insurance score is calculated
Best known for its credit scoring model, FICO also has an algorithm to calculate insurance scores. It considers five factors, each assigned a different weight.
- Credit history: 40%
- Current level of debt: 30%
- Length of credit history: 15%
- New credit: 10%
- Credit mix: 5%
Another consideration is your history of claims: Many insurers incorporate information from your Comprehensive Loss Underwriting Exchange (CLUE) Report, which collects up to seven years of auto and personal property claims.
What's a good insurance score?
Insurance scores using the LexisNexis Risk Classifier range from 200 to 997. According to the company, a score of 770 or better is considered good and will get you favorable rates. A score of 500 or below is considered poor and could result in higher premiums or being turned down for coverage.
| Insurance score range | Rating |
| 770-977 | Good |
| 626-769 | Average |
| 501-625 | Below average |
| 200-500 | Poor |
Source: LexisNexis
Can I see my insurance score?
FICO and TransUnion don't make insurance scores available to consumers but you can ask your current or prospective insurer to provide yours. You can also reach out to LexisNexis and request your Consumer Disclosure Report.
While your insurance score isn't the same as your credit score, it's calculated using the same information. Someone with a high credit score likely has a high insurance score.
How to raise your insurance score
Your credit history typically accounts for 40% of your insurance score. So the easiest way to improve your score is by improving your credit.
A strong track record of on-time payments can boost your insurance score, as can lowering your ratio of outstanding debt to available credit and limiting the number of loan and credit cards you apply for. Products designed to improve your credit score, like *Experian Boost™, can also juice your insurance score.
Experian Boost™
On Experian's secure site
Cost
Free
Average credit score increase
13 points, though results vary
Credit report affected
Experian®
Credit scoring model used
FICO® Score
Results will vary. See website for details.
How to sign up for Experian Boost:
- Connect the bank account(s) you use to pay your bills
- Choose and verify the positive payment data you want added to your Experian credit file
- Receive an updatedFICO® Score
Learn more about eligible payments and how Experian Boost works.
FAQs
What is considered a good insurance score?
A score of 770 or higher is considered good and will get you the best rates.
How can I fix my insurance score?
Paying bills on time, lowering your ratio of debt to available credit and limiting the number of credit card applications you fill out will all help raise your credit-based insurance score.
Does applying for insurance affect my credit score?
While insurance companies usually check your credit during the quote process, it's a soft inquiry that doesn't show up to lenders or change your credit score.
What's the difference between a credit score and an insurance score
While both incorporate your credit history, they weigh various factors differently. Credit scores typically put slightly more emphasis on credit mix, or the variety of credit accounts you have.
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*Results will vary. Not all payments are boost-eligible.Some users may not receive an improved score or approval odds. Not all lenders use Experian credit files or use scores impacted by Experian Boost.Learn more.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
