What is a good TransUnion auto insurance score?

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.... read full answer

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.

Yes, credit affects car insurance premiums in every state except for California, Hawaii, and Massachusetts. Car insurance companies use credit score as one factor in determining premiums because credit history correlates with a driver's likelihood of filing a claim. Insurance companies do not use a consumer's standard credit score, though. Instead, they look at a driver's ... read full answerauto insurance score, which is based on the same information as a credit score, like payment history and debt.

Roughly 95% of personal car insurance companies use auto insurance scores when calculating premiums, according to FICO. People with no credit history pay an average of 67% more for auto insurance than drivers with excellent credit as a result. However, insurance companies consider factors besides credit as well. Your driving record, age, vehicle, and location can all affect your premium, too.

It’s also important to realize that you are still protected from unfair practices, even when car insurance companies are allowed to use credit in your state. For instance:

• Insurance companies in most states are not allowed to deny coverage simply because of an insurance score.

• Many states allow drivers to request that their insurance score not be considered if it was negatively affected by a major life event like a divorce, a death in the family, or an involuntary job loss. If your state has such laws, your insurance company is required to comply.

Finally, the fact that credit scores and insurance scores are based on similar information means that credit-score improvement can result in cheaper car insurance premiums, too. You can check your latest credit score for free with WalletHub and get customized advice for how to improve your credit.

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.