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An insurance score is a number based on your credit history that is used to predict your likelihood of filing an insurance claim and costing an insurer money. Auto insurance scores, also called credit-based insurance scores, can be used to set car insurance premiums everywhere except for Massachusetts, Hawaii and California.
The credit-scoring company FICO created the first insurance scores in 1993, and today FICO estimates that 95% of all personal insurers take insurance scores into account.
FICO scores are based on five categories:
- 40% past payment history
- 30% current level of indebtedness
- 15% length of credit history
- 10% new credit
- 5% variety of credit types
Multiple studies, including one by the Federal Trade Commission, demonstrate that the scores effectively predict risk for insurers, which is logical because individuals who responsibly handle their finances figure to be equally responsible with their cars or homes.
Where to Check Your Insurance Score
Insurance scores rely on information from your credit reports and are formulated by three main companies: FICO, LexisNexis, and TransUnion.
- FICO insurance scores range from 250 to 900.
- LexisNexis scores range from 300 to 950.
- TransUnion scores fall between 150 and 900.
In general, insurance scores of 770+ are considered good, but the specifics vary based on the type of insurance score, given the different ranges.
How to Raise Your Insurance Score
Your credit information strongly influences your insurance score, so raising your credit score can decrease your car insurance rates. You can get personalized advice on how to improve your credit score, as well as how long it will take, using the Credit Analysis feature of your free WalletHub account.
Get Your Free Auto Insurance Score
Check NowPeople also ask
What is a good TransUnion auto 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 typical credit scores.
On the other hand, LexisNexis insurance scores range from 200 to...
read full answerWhat is a good credit score for auto insurance?
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 checking 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.
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read full answerHow can I increase my auto insurance score?
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
- Pay off debt.
- Keep your credit accounts open, even if you aren’t using them.
- Automate your payments to avoid forgetting them.
- Keep your credit utilization...
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