In most US states, insurers check your credit-based insurance score when your auto or home policy renews and use it as one factor in setting your premium. A lower score typically results in higher premiums, while a higher score can qualify you for discounts of 10 to 30 percent or more. California, Hawaii, Massachusetts, and Michigan restrict or ban the use of credit in insurance pricing, so the impact varies by where you live.

What Is a Credit-Based Insurance Score?

A credit-based insurance score is different from the credit score you see when applying for a loan. Insurers use a specialized scoring model that weighs factors from your credit report to predict the likelihood you will file a claim. According to the Insurance Information Institute, insurers have found statistical correlations between certain credit behaviors and claim frequency (III, 2026).

The score is built from your credit report data: payment history, outstanding debt, length of credit history, new credit accounts, and types of credit used. It does not include your income, assets, or the actual numeric credit score lenders use. Insurers typically obtain this information from the three major credit bureaus (Equifax, Experian, TransUnion) through specialized insurance scoring vendors like LexisNexis or FICO.

How Credit Scores Affect Renewal Premiums

At renewal, your insurer recalculates your premium using current rating factors, and in most states that includes pulling an updated credit-based insurance score. If your credit profile has improved since you first bought the policy, you may see your premium decrease or qualify for a better tier. If your credit has declined due to missed payments, high balances, or new collections, your renewal premium may increase even if you have had no claims or violations.

The impact varies by carrier and state. Some insurers tier policies into preferred, standard, and non-standard categories, and your credit score heavily influences which tier you fall into. Moving from preferred to standard can mean a premium increase of 20 to 50 percent or more, depending on the carrier and coverage type.

Renewal is also when life changes catch up with you. A divorce, medical debt, or job loss that hurt your credit in the past six to twelve months will show up in the insurer’s updated pull and can directly affect your rate at renewal.

Which Insurance Types Use Credit Scores

Auto insurance and homeowners insurance are the two coverage types that most commonly use credit-based insurance scores in pricing. Renters insurance may also factor in credit, though the impact is typically smaller given the lower policy limits.

Life insurance and health insurance generally do not use credit scores in underwriting or pricing. Health insurers are prohibited by the Affordable Care Act from using credit information, and life insurers focus on medical history and mortality risk instead.

State Restrictions You Should Know

Four states prohibit or significantly restrict the use of credit in insurance pricing:

Read also: How Your Credit Score Affects Your Insurance Premiums

  • California bans credit scoring for auto insurance entirely.
  • Hawaii prohibits it for auto insurance (but not home).
  • Massachusetts bans it for auto insurance.
  • Michigan banned credit scoring for auto insurance as part of its 2019 no-fault reform.

Other states allow it but regulate how insurers apply it. Maryland, for example, limits how much weight insurers can give credit compared to other factors. The National Association of Insurance Commissioners provides state-by-state consumer guidance on credit and insurance (NAIC, 2026).

If you live in one of the states that bans credit scoring for auto coverage, your renewal premium will be based on driving record, claims history, coverage choices, vehicle type, and other underwriting factors, but not your credit.

What You Can Do

If your credit has improved since your last renewal, ask your agent or carrier whether they will re-pull your score mid-term or whether you need to wait until renewal. Some carriers allow you to request a credit re-score if you have made significant improvements.

To improve your credit-based insurance score over time, focus on paying bills on time, reducing outstanding balances, avoiding new collections, and maintaining a mix of credit types. Checking your own credit report through the Consumer Financial Protection Bureau’s resources will not hurt your score and can help you spot errors to dispute (CFPB, 2026).

Shopping around at renewal is also smart. Different carriers weigh credit differently, and some may offer you a better rate even with the same credit profile. Be sure to compare quotes from at least three carriers, and ask each one how credit affects your specific quote.

Important Considerations

This article provides general educational information about how credit-based insurance scores affect premiums at renewal in the US. It is not personalized insurance, financial, or legal advice. Coverage rules, rating factors, and state restrictions vary. Before making decisions about your insurance, confirm current rules with your state Department of Insurance and speak with a licensed insurance agent who can review your personal situation and recommend appropriate coverage for your needs. Premium factors and carrier practices change, so verify all details with your insurer or agent at renewal time.