Will My Credit Rating Change My Insurance Rates?
A client recently asked me a great question, and I thought it was one worth sharing:
“Will my credit rating affect my insurance rates?”
The short answer is yes—it can. Credit plays a surprising (and often misunderstood) role in how insurance premiums are calculated for both auto and homeowners policies.
Let’s walk through how it works, what you need to know, and what you can do about it.
Why Do Insurance Companies Use Credit?
Whether you like it or not, insurance companies have been using credit as part of their underwriting process for decades. Studies have shown that a person’s credit behavior can be a strong indicator of how likely they are to file a claim.
This doesn’t mean your credit score directly says how “good” or “bad” of a driver or homeowner you are. Instead, it’s one of many data points used to assess your overall risk level.
Will It Hurt My Credit When Insurance Companies Check It?
Nope—not at all. When an insurance company checks your credit, they do what’s called a soft inquiry, not a hard inquiry like a mortgage or credit card application.
Here’s the difference:
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Soft inquiry: No impact on your credit score; doesn’t show up to lenders.
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Hard inquiry: Can temporarily lower your score and is visible to lenders.
So rest assured, getting an insurance quote won’t hurt your credit in any way.
Does My Credit Rating Affect My Insurance Rates Over Time?
Here’s where things get a little more nuanced.
Insurance companies only check your credit when you first apply for coverage—either during the quote process or when the policy is issued. That means:
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If your credit score improves, your rate doesn’t automatically go down.
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If your credit score drops, your premium won’t automatically go up either.
Insurers don’t continuously monitor your credit like a credit card company might.
Can I Request a “Re-Score” If My Credit Improves?
Yes! But it doesn’t happen automatically—you have to request it.
If you’ve experienced a significant increase in your credit score, your insurance agent can contact the carrier and ask for a re-score. This allows the company to run a new soft credit check and see if you now qualify for lower rates.
⚠️ Important: Insurance carriers don’t allow re-scores frequently. It’s best to only request one if your credit has improved substantially—otherwise, it likely won’t impact your premium.
Tips to Monitor and Improve Your Credit
If you’re serious about improving your rates long-term, start by building strong credit habits:
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Set up credit monitoring
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Pay bills on time
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Keep credit card balances low
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Avoid opening too many new accounts at once
Small, consistent steps can add up to a healthier score—and potentially, lower insurance premiums in the future.
✅ Final Thoughts
So, will your credit rating change your insurance rates? Not automatically—but it can make a difference. Your insurer won’t monitor your score over time, so if you’ve seen a big improvement, contact your agent and ask if a re-score might benefit you.
📲 Need help understanding your policy or want to explore a re-score? Reach out to our team—we’re happy to walk you through the process and look for savings opportunities.
