Generally, the vast majority of insurers use credit-based scores to price insurance. However, this practice is banned in Massachusetts, Michigan, Hawaii, and California.
Some states restrict its use to property insurance, like auto and homeowners policies. Other states allow it to be used with any type of insurance.
Several Factors
Generally, an insurance company will use a credit-based insurance score as just one factor in its underwriting process.
Additionally, other factors may be considered depending on the type of insurance.
For example, with auto insurance, factors could include your zip code and the driver’s age.
Also, the make, model, and year of the car, and the miles driven annually, may matter.
The use of credit scores to determine insurance rates is rooted in research.
It shows individuals with lower credit scores tend to file more claims.
You can ask your insurance company if a credit-based insurance score was used to underwrite and rate your policy.
You can also ask in which risk category you were placed.
If you want to improve your credit-based insurance score, consider steps you would take to improve your credit rating.
Make timely debt payments, clear up past disputes, and keep credit card balances low.
Need expert advice on your home or auto insurance? Reach out to the team at HomeSale Insurance Services today at
800-425-5130 to speak with a licensed specialist and make sure you’re getting the best coverage at the right price.
1. Forbes, June 10, 2024.
2. ValuePenguin.com, May 14, 2024.
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