Drivers with poor credit pay an average of $212/month for car insurance [1][2], compared to $120/month for those with excellent credit [3], a difference of $1,104 per year. In 46 states plus D.C., insurers use credit-based insurance scores as a standard rating factor. Only California, Hawaii, Massachusetts, and Michigan fully prohibit this practice. Click any column header to sort.
| Credit Level | Monthly Average | Annual Average |
|---|---|---|
| Excellent (750+) | $120 | $1,440 |
| Good (670–749) | $150 | $1,800 |
| Fair (580–669) | $177 | $2,124 |
| Poor (below 580) | $212 | $2,544 |
Last updated: March 2026
How Credit-Based Insurance Scoring Works
A credit-based insurance score is not the same as your FICO score, though they draw from the same credit report data. Insurers use specialized models (most commonly from LexisNexis or TransUnion) that weigh factors like payment history, outstanding debt, credit history length, and recent inquiries. The score predicts the statistical likelihood of filing a claim. Multiple actuarial studies have found a correlation between lower credit scores and higher claim frequency, which is why regulators in most states permit its use.
How to Improve Your Insurance Score
Since insurance scores draw from the same data as credit scores, the strategies for improving both are similar: paying bills on time, reducing outstanding debt (especially credit card balances), avoiding unnecessary new credit applications, and maintaining older accounts. The impact is significant. Moving from poor to good credit can save an estimated $62/month, and reaching excellent credit can save $92/month. These improvements typically take six to twelve months of consistent behavior to affect your score.
If You Live in a Credit-Prohibited State
If you live in California, Hawaii, Massachusetts, or Michigan, your credit has no impact on your car insurance rate. Maryland, Oregon, and Washington have partial restrictions. In these states, other factors carry more weight: your driving record, age, vehicle type, and location become the primary determinants. Use our rate factor breakdown tool to see how each factor affects your rate, or check the overpaying calculator to compare your profile to the average.
Frequently Asked Questions
How much does credit score affect car insurance?
Credit score has a significant impact on car insurance rates. In 2026, drivers with poor credit pay an average of $212/month, compared to $120/month for those with excellent credit. That is a difference of $92/month or $1,104/year for the same coverage on the same vehicle.
Which states ban credit score for car insurance?
California, Hawaii, Massachusetts, and Michigan prohibit insurers from using credit scores to set car insurance rates. Maryland, Oregon, and Washington have partial restrictions. In the remaining 43 states plus D.C., insurers use credit-based insurance scores as a standard rating factor.
What is a credit-based insurance score?
A credit-based insurance score is not the same as your regular credit score (FICO). Insurers use a specialized scoring model that weighs factors like payment history, outstanding debt, length of credit history, and new credit inquiries. The score predicts the likelihood of filing a claim. Improving your credit score generally improves your insurance score as well.
For full editorial context and tips on improving your insurance rate through credit, see our car insurance cost benchmarks guide.
This data is for informational purposes only and does not constitute insurance, financial, or legal advice. Data may contain errors or be outdated. Always verify details with a licensed insurance professional before making coverage decisions.
Sources
[1] QuoteFii, "Rate Factor Analysis: Credit Score Impact from 3 State Departments of Insurance (TX, NV, SC)," blog.quotefii.com
[2] NAIC, "2022/2023 Auto Insurance Database Report (baseline premium)," content.naic.org
[3] MoneyGeek, "Average Car Insurance Cost (Excellent credit tier)," moneygeek.com