What is an insurance score?

A good TransUnion auto insurance score is in the high 700s or above. TransUnion notes on its website that 770 is generally considered a good insurance score, but there are several different types of insurance scores with different score ranges. TransUnion auto insurance scores, also known as TransUnion TrueRisk scores or TransUnion Insurance Risk scores, range from 150 to 950, unlike … read full answertypical credit scores.

On the other hand, LexisNexis insurance scores range from 200 to 997 and are considered good starting at 776. In addition, FICO scores fall between 300 and 900, with 700 and above classified as good. But it’s important to remember that what these insurance-scoring companies think is a good score might not be exactly what an insurance company considers good enough to merit the lowest premiums.

TransUnion auto insurance scores are calculated using information from your credit report, just like your credit score. But insurance scores are designed to estimate your risk for insurers, not lenders. In most states, insurance companies can use your credit data as a factor in setting your premium, meaning that a higher score will save you money. On average, having no credit will cost you 67% on insurance compared to having excellent credit.

As a result, improving your credit score will help raise your insurance score, thereby decreasing your car insurance premium over time. With that in mind, make sure to check your latest credit score for free and use WalletHub’s Credit Analysis tool to get personalized improvement tips.

A good credit score for car insurance is 700 or higher, and scores of 750 and above are considered excellent. People with good or excellent credit tend to pay much less for car insurance than drivers with no credit or bad credit. But even though you can tell a lot about your potential car insurance costs by … read full answerchecking your normal credit score, it’s important to note that car insurance companies actually use credit-based auto insurance scores, which are a bit different.

Auto insurance scores are different from credit scores because they are designed to calculate your risk for insurance carriers rather than lenders. Like traditional credit scores, insurance scores are based on the contents of one of your major credit reports. But the categories are weighted differently than in your normal credit score, and the score ranges aren’t always the same.

While credit scores range from 300 to 850, FICO Auto Scores fall between 250 and 900. A good score is anything above 700. LexisNexis Attract Auto Insurance Scores go from 500 to 997, and scores above 776 are considered good. Finally, TransUnion auto insurance scores, officially called Insurance Risk Scores – Auto Model, range from 150 to 950. TransUnion doesn’t specify what a good score is within its own range, but it does say that 770 is generally a good insurance score.

Although auto insurance scores are important, every insurer uses them slightly differently, meaning that you should take the exact number with a grain of salt. Additionally, insurers in California, Hawaii, and Massachusetts are legally banned from taking credit information into an account. And in every state, many other factors affect car insurance rates, meaning that an insurance score is only one piece of the puzzle.

Unlike credit reports, you are not entitled to free information on your insurance score. However, you can purchase access to your insurance score from LexisNexis. Checking your credit reports and correcting any errors is also a smart move, since improving your credit score will raise your insurance score and lower your premiums.

You can increase your auto insurance score by making sure you build a long and healthy credit history. Keep in mind that anything you can do to raise your credit score will also positively affect your auto insurance score.

How to Improve Your Auto Insurance Score

1. Pay off debt.
2. Keep your credit accounts open, even if you aren’t using them.… read full answer
3. Automate your payments to avoid forgetting them.
4. Keep your credit utilization ratio below 30%.
5. Don’t apply for credit too often.
6. Check your credit report for errors.
7. Become an authorized user or open a secured card if you have bad credit.
8. Vary the types of credit you use.

Like credit scores, auto insurance scores are based on a combination of factors, including your payment history, the amount you owe, the length of your credit history, and the types of credit you have. Improving any or all of these factors can raise your auto insurance score and therefore lower your premium.

In general, auto insurance scores help insurance companies determine premiums because evidence shows that drivers who are responsible with money are safer on the road. Insurance companies will also look at your driving history and claim history when determining your risk level so keeping those clean as well could represent an advantage.

To find out more, read WalletHub’s complete guide to auto insurance scores. You can also sign up for a free WalletHub account to get free credit scores and customized credit-improvement advice.