Credit Score Impact on Car Insurance Rates

In states that allow it, many car insurance companies review credit history to make coverage decisions and set rates. They believe credit history can predict claim risk, and higher risk leads to higher premiums. Some companies that check credit include Allstate, GEICO, Nationwide, and Progressive. Insurance companies use credit-based insurance scores, which differ from standard credit scores, to assess a driver's loss potential and set rates accordingly. Drivers with poor credit may pay significantly more for insurance, with a 2023 study showing annual rates for drivers with clean driving records ranging from $470 to $1,012 due to credit score differences.