How Your Credit Affects Car Insurance (and Where It Can't)
Most insurers use credit-based insurance scores to help set rates, but some states ban or limit it. How it works and which states restrict it.
Updated October 7, 2026 · 5 min read
Key takeaways
- In most states, insurers can use a credit-based insurance score as one factor in setting your auto rate.
- California, Hawaii and Massachusetts don't allow credit to be used to set auto insurance rates, and Michigan bans the use of credit scores for auto rates.
- Maryland, Oregon and Utah restrict how credit can be used, especially at renewal.
- Getting quotes doesn't hurt your credit score. Insurers use a soft inquiry.
What a credit-based insurance score is
A credit-based insurance score uses information from your credit report, such as payment history and outstanding debt, to predict the likelihood of insurance claims. It isn't the same as the credit score a lender uses, and it doesn't include income, race or other personal characteristics. Insurers that use one treat it as one factor among many, alongside your driving record, car, location and coverage.
States that ban or limit credit
- California, Hawaii and Massachusetts: auto insurers can't use credit history to set rates or decide whether to insure you.
- Michigan: since July 2020, insurers can't use credit scores to set auto rates. The same law bars sex, marital status, home ownership, education, occupation and ZIP code as rating factors.
- Maryland: auto insurers can't use credit to deny a first application, cancel, refuse renewal or raise your premium at renewal.
- Oregon: credit can be used at your first quote only alongside other underwriting factors, and insurers can't cancel or non-renew a policy in force for more than 60 days because of credit.
- Utah: credit can be used when you first apply, but not later to deny coverage or remove a discount based only on a change in credit.
Washington state's 2022 attempt to ban credit-based pricing was overturned in court, so insurers there can use credit. Rules change, so check with your state's insurance department.
Free, no obligation, about two minutes. Or call: Insured 1-888-773-7558 · Uninsured 1-844-900-2302
Shopping doesn't hurt your credit
Insurers that check credit for a quote use a soft inquiry, which doesn't affect your credit score. You can compare as many quotes as you want.
If credit is holding your rate back
- Pay bills on time and keep credit card balances low. Improvements can lower your rate at renewal.
- Check your credit reports for errors at AnnualCreditReport.com and dispute any you find.
- If you've had a major life event, like a divorce, job loss or serious illness, ask your insurer whether it will reconsider your rate. Many states require insurers to consider extraordinary life circumstances.
- Compare insurers. They weigh credit differently, and some weigh it less than others.
Frequently asked questions
Does checking car insurance rates hurt my credit?
No. Insurers use soft inquiries for quotes, which don't affect your credit score.
Which states don't allow credit in car insurance rates?
California, Hawaii and Massachusetts don't allow it, and Michigan bans credit scores as an auto rating factor. Maryland, Oregon and Utah restrict how it's used.
Is an insurance score the same as a credit score?
No. It uses credit report information, but it's designed to predict insurance claims rather than loan repayment.
Sources
How this guide was made: researched and drafted with AI assistance (Wren AI), and checked against the government and industry sources listed above. Wren AI is an AI tool, not a person or a licensed insurance agent.
This guide is general information, not insurance, legal or tax advice. Coverage, rules and prices vary by state, insurer and policy. Confirm details with a licensed agent before you buy. Read our editorial policy.