How To Access Your Auto Insurance Score Online

Auto insurance scores are numerical scores used to predict the likelihood of a driver having an accident or filing a claim. They are calculated from information on credit reports and are used by car insurers as a factor in determining insurance rates. While auto insurance scores are distinct from traditional credit scores, they are heavily based on credit history. Credit scores predict a person's ability to repay debt, while auto insurance scores use credit history to predict the likelihood of filing a claim. Auto insurance scores can be obtained from LexisNexis or directly from insurance companies, and improving them involves maintaining good credit-related behaviours such as making timely payments and keeping credit utilisation low.

Credit-based insurance scores

In the United States, credit-based insurance scores are used for auto, homeowners, and other types of insurance, depending on the state and insurer. While a good credit-based insurance score can lead to a better rate, it is essential to note that it is only one factor in determining insurance rates. Other factors, such as claim history, location, and the type of vehicle or home, also play a role in setting insurance premiums.

It is worth mentioning that some states have banned the use of credit-based insurance scores in calculating insurance rates. These states include California, Hawaii, Maryland, Massachusetts, and Michigan. The specific regulations regarding credit-based insurance scores vary from state to state, so it is advisable to check with your state's insurance department for more information.

While you may not be able to easily access your credit-based insurance score, you can focus on improving your credit reports, which form the basis for these scores. Paying your bills on time, reducing credit card balances, and maintaining a good credit history can positively impact both your credit scores and credit-based insurance scores.

How to check your auto insurance score

An auto insurance score is a rating used by insurance companies to estimate your risk of filing a claim. It's worth noting that this is distinct from your credit score, although the two are related. While your credit score predicts your ability to repay debt, your auto insurance score uses your credit history to predict the likelihood of filing a claim in the future and the cost of that claim.

Your auto insurance score can determine what you pay for car insurance, with lower scores resulting in higher premiums. A higher score, or a good score, predicts a policyholder will have fewer accidents and claim filings.

There are several factors that can contribute to your auto insurance score, including previous claims, accident history, and credit history. Credit history is a significant factor, with stronger credit histories implying better insurance scores. Relevant factors include the frequency of late and on-time payments, the average length of your credit history, the number of credit inquiries, and the number of liabilities still open and in good standing.

While you cannot check your auto insurance score in the same way you can check your credit score, there are a few ways to estimate it. You can request your insurance score from your insurance company or LexisNexis, although some insurers may require a reference number for LexisNexis. Alternatively, you can check your credit score, as both types of scores draw from your credit report. If you have maintained a good credit score, you may have a more favourable auto insurance score.

• Make any loan or credit card payments on time
• Pay bills, taxes, and other fees on time
• Keep balances low on your credit cards
• Keep your oldest accounts open to demonstrate a robust credit history
• Avoid applying for new credit cards or loans frequently

Improving your auto insurance score

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, including your credit history. A better score may result in a lower insurance rate.

• Get a credit report: Pull your credit report from each of the three main reporting bureaus (Equifax, Experian, and TransUnion) to understand your current credit score and identify areas for improvement.
• Pay bills on time: Set reminders or use other methods to ensure that you pay your bills when they are due. This simple task can significantly improve your insurance score over time.
• 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 and hurt your insurance score.
• Keep accounts open: Keeping credit accounts open for an extended period demonstrates stability and financial responsibility. If you have no credit history, open a new account occasionally and build your credit over time by making timely payments.
• Keep outstanding balances low: Aim to use 20-30% of your available credit. Using more than this range may indicate that you cannot afford to pay off your debts, while staying within it shows that you are wisely managing your credit.
• Regularly review your credit report: You are entitled to a free and secure annual credit report from Equifax, Experian, and TransUnion. Spread them out over the year to monitor your credit score effectively.
• Make a plan to pay down debt: Develop a strategy to reduce your existing debt without incurring new debt. This demonstrates financial responsibility and improves your creditworthiness.
• Limit new debt: Minimize the amount of new debt you take on to improve your creditworthiness and insurance score.
• Establish a long credit history: A longer credit history has a positive impact on your insurance score. Keeping your oldest credit accounts open can help demonstrate a track record of responsible financial behaviour.
• Work with your creditors: Communicate with your creditors to resolve outstanding balances before they are sent to a debt collector, as this can negatively impact your score.

How auto insurance scores affect rates

Auto insurance scores are numerical scores used to predict how likely you are to be in an accident and file a claim. They are calculated from information on your credit reports, such as your credit history and credit score. Car insurers use these scores to determine how much you'll pay for car insurance.

A higher auto insurance score generally predicts that a policyholder will have fewer accidents and claim filings. As a result, an insurance company is more likely to accept you as a customer and offer you lower rates. Conversely, a lower score can increase the likelihood of your application being denied or result in higher rates.

While auto insurance scores are calculated from your credit information, they are not the same as credit scores. Credit scores predict your ability to repay debt, whereas auto insurance scores use credit information to predict the likelihood of filing a claim and the cost of that claim.

In addition to auto insurance scores, insurers consider other factors when determining rates, such as age, vehicle type, insurance coverage, and driving history. It's important to note that auto insurance scores may not be used as the sole criterion for rate assessments, and their use may be prohibited in certain states.

To improve your auto insurance score, focus on maintaining good credit health habits. This includes making timely debt payments, keeping credit utilization low, and having numerous accounts in good standing.

How auto insurance scores differ from credit scores

Auto insurance scores and credit scores are distinct but related concepts. While both can influence your insurance policy and rates, they are calculated differently and serve different purposes. Here's how auto insurance scores differ from credit scores:

Purpose

Credit scores are used to predict your ability to repay debts. Lenders use credit scores to assess your creditworthiness and the likelihood of you repaying a loan. On the other hand, auto insurance scores are used specifically to predict the likelihood of you filing an insurance claim in the future and the potential cost of that claim. In other words, auto insurance scores help insurers assess the risk of insuring you and your vehicle.

Calculation

Credit scores are calculated based on various factors, including payment history, credit utilisation, length of credit history, new credit accounts, and types of credit used. Credit scores give a more comprehensive overview of your creditworthiness. In contrast, auto insurance scores are primarily calculated using your credit history and other factors such as previous claims and accident history. Auto insurance scores focus on assessing the risk of you filing an insurance claim.

Impact on Insurance Rates

A good credit score can positively impact your insurance rates by indicating financial stability and a lower risk of filing claims. However, auto insurance scores are designed specifically to assess insurance risk and can have a more direct impact on your insurance rates. A higher auto insurance score suggests a lower risk of filing claims, which can result in lower insurance rates. Conversely, a lower auto insurance score may lead to higher insurance rates.

Availability

Credit scores are widely available, and you can obtain your credit report and score from major credit bureaus, such as Experian, Equifax, and TransUnion. In contrast, auto insurance scores are often proprietary to each insurance company, and there is no standard way to calculate them. As a result, auto insurance scores may not be readily available to consumers, and the calculation methods can vary significantly across different insurers.

Regulation

The use of credit scores in lending decisions is regulated to ensure fairness and prevent discrimination. Similarly, the use of auto insurance scores is also subject to regulation, and some states have banned or restricted their use in setting insurance rates. For example, California, Hawaii, Massachusetts, and Michigan have prohibited the use of credit-based insurance scores for determining car insurance rates.

Frequently asked questions