In 2025, credit scores remain a major factor in determining auto insurance rates in most U.S. states. Insurers typically use a specialized "credit-based insurance score"—not your standard FICO score—to help set premiums, with the logic that credit history statistically correlates with claim risk137.
Drivers with poor credit pay 61%–76% more for auto insurance than those with good credit, and in some cases, more than double the rate126.
For example, in Oklahoma, drivers with poor credit pay close to $5,000 per year for full coverage, while those with good credit pay around $2,2002.
The dollar impact can be dramatic: a poor-credit driver might pay $1,500 or more per year above what a similar driver with excellent credit pays16.
Even moving from "poor" to "average" credit (e.g., from a score of 400 to 580) can result in substantial savings2.
Studies show a strong link between credit behavior and insurance risk; drivers with lower credit scores are statistically more likely to file claims17.
Over 92% of major insurers use credit-based scores where allowed, believing it leads to more accurate and fair pricing13.
California, Hawaii, Massachusetts, and Michigan ban the use of credit scores for auto insurance pricing134.
Some states have partial restrictions (e.g., Maryland, Oregon, Utah), but in most states, credit remains a key rating factor14.
670–740
Around 580
Improving from poor to average can have a significant effect on premiums2.
Payment history is a major factor.
Lower utilization improves your score.
Use tools to track and manage your credit health12.
Insurers weigh credit differently, so comparing quotes is essential.
If you live in a state that bans or restricts credit use, your premium won’t be affected by your score134.
Good credit can qualify you for additional savings38.
A poor credit score can increase your auto insurance premium by 60%–100% or more in most states, sometimes costing more than a major driving violation. Improving your credit score—even modestly—can lead to substantial savings. Always compare rates and know your state’s regulations regarding credit use in insurance pricing
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