Accessing Your Auto Insurance Score: A Step-By-Step Guide

Auto insurance scores are numerical scores used by car insurance companies to estimate the risk of you filing a claim. They are calculated from information on your credit reports, such as payment history, outstanding debt, length of credit history, pursuit of new credit, and credit mix. A higher auto insurance score generally indicates lower risk and can lead to lower insurance premiums, while a lower score can result in higher premiums. These scores are not directly tied to credit scores but are influenced by similar factors. Auto insurance scores can be accessed by requesting them from LexisNexis or contacting your insurance company directly. Certain states have banned the use of credit-based insurance scores, including California, Hawaii, Massachusetts, and Michigan.

How to request your auto insurance score

To request your auto insurance score, you can contact your insurance company directly. If they don't offer your score, they may provide a reference number to use if you call LexisNexis, which collects data used by many insurance companies. You can also request your insurance score file from LexisNexis using their online portal.

Alternatively, you can ask a company that gave you an insurance quote whether it used an insurance score to calculate your rate and then request more details. Each company will have its own way of calculating your score, so it may differ from insurer to insurer.

It's worth noting that certain states have banned the use of credit scores when calculating insurance rates, including California, Hawaii, Maryland, Massachusetts, and Michigan. Check with your state's insurance-regulating department to see if credit history is allowed to factor into car insurance rates in your state.

The impact of credit history on auto insurance scores

Credit history has a significant impact on auto insurance scores, and by extension, insurance premiums. A credit-based insurance score is used by insurance companies to determine the likelihood that a customer will file an insurance claim. This is based on the idea that people who manage their finances well are also more likely to maintain their vehicles well.

The credit-scoring company FICO created the first insurance scores in 1993, and now almost all auto insurers use insurance scores to underwrite their policies. While each insurer has its own proprietary system for calculating insurance scores, common factors that are usually considered include:

• Outstanding debt
• Length of credit history
• Credit mix
• Payment history
• Pursuit of new credit

A higher insurance score indicates that a customer is low risk and will likely pay a lower premium. Conversely, a lower insurance score suggests a higher risk of filing insurance claims and generally leads to higher premiums.

It's worth noting that certain states, including California, Hawaii, Massachusetts, and Michigan, have banned or limited the use of credit history in determining insurance rates.

How to improve your auto insurance score

Auto insurance scores are ratings based on information from credit reports that insurers use to estimate how likely drivers are to file a claim. A good auto insurance score can benefit your insurance rate, while a bad one could mean you’re paying more each month. Here are some tips to improve your auto insurance score:

• Get a credit report: Pull your credit report once a year for free from each of the three main reporting bureaus: Equifax, Experian, and TransUnion. Reviewing your credit report will give you an idea of your current credit score and where you can improve.
• Pay bills on time: Set reminders or use sticky notes to ensure that you pay your bills when they are due. This simple task can significantly improve your insurance score.
• Avoid opening too many credit accounts at once: Opening multiple credit accounts within a short time frame can make you look like a risky borrower, which can hurt your insurance score.
• Keep accounts open: Keeping credit accounts open for a longer duration shows stability and financial responsibility. If you have no credit, open a new account occasionally and build your credit history over time.
• Keep outstanding balances low: Aim to use 20-30% of your available credit. Using more than this may indicate that you cannot afford to pay off your debts, which can negatively impact your insurance score.
• Improve your credit score: Since auto insurance scores are heavily based on credit scores, improving your credit score will also positively affect your auto insurance score. This includes paying bills on time, having low credit utilization, and making other good financial choices.
• Be a safe driver: While things like speeding tickets and insurance claims don't factor into your auto insurance score directly, they are considered when insurance companies determine your premium. Therefore, improving your driving record can help you save money.

How auto insurance scores differ from credit scores

Auto insurance scores and credit scores are calculated using similar factors, but they are not the same. While credit scores are used to determine how likely you are to repay a loan, auto insurance scores are used to predict the likelihood of you filing a claim.

Auto insurance scores are calculated using information on your credit reports, and they are used by car insurers to determine how much you'll pay for car insurance in states where that is allowed. The scores are meant to help predict the likelihood of you having a car accident or filing a claim, which could result in your insurance company experiencing a loss.

In the US, certain states have banned the use of credit when calculating insurance rates, including California, Hawaii, Maryland, Massachusetts, and Michigan.

While both auto insurance scores and credit scores are calculated using information from the same source, they are not technically related. Auto insurance scores are calculated using factors such as payment history, outstanding debt, length of credit history, pursuit of new credit, and mix of credit experience. Credit scores, on the other hand, are calculated using factors such as payment history, credit utilisation, credit mix, and credit history length.

How auto insurance scores affect your rates

Auto insurance scores are numerical scores used to predict the likelihood that you’ll have an accident or file a claim. They are calculated from information on your credit reports and are used by car insurers as one of many factors to determine how much you’ll pay for car insurance.

In the early 1990s, insurers found that credit-based auto insurance scores could help them predict the likelihood that a policyholder would file a claim, which could result in the insurance company experiencing a loss. This means that factors outside of your driving record can influence how insurable you are and what rates you are offered.

People with lower insurance scores are deemed to pose a higher risk to the insurance company and are thus charged higher rates. Conversely, people with higher scores are considered lower risk and typically pay lower rates.

Your insurance score is based heavily on your credit report. Federal Trade Commission research has confirmed that credit report factors correlate closely with the likelihood of filing insurance claims. The idea is that people who manage their credit and finances well are likely to maintain their homes and vehicles well, too.

While each insurer has its own proprietary system for calculating an insurance-based credit score, common factors that usually factor into this score include:

• Outstanding debt
• Credit history length
• Credit mix
• Payment history
• Pursuit of new credit

In addition to these factors, auto insurance companies may also take into account the make and model of the vehicle you're insuring, the number of miles you drive per year, your zip code, and the age of the people who will drive the car.

It's worth noting that certain states have banned the use of credit when calculating insurance rates, including California, Hawaii, Massachusetts, and Michigan. In these states, auto insurance rates are based on factors such as driving records, location, and other characteristics.

Frequently asked questions