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Updated April 2026 | ValuePenguin 2026, FTC, III

Car Insurance by Credit Score: $156 Excellent vs $385 Poor

A 2.5x swing from the cheapest to most expensive credit tier. Banned in California, Hawaii, Massachusetts, and Michigan. The mechanics of insurance scoring, the carriers that price credit hardest, and how to move tiers.

Excellent (740+)
$156
740-850
Good (670-739)
$208
670-739
Fair (580-669)
$278
580-669
Poor (under 580)
$385
300-579

The four-tier credit pricing curve

Carriers segment drivers into credit-based insurance score tiers, typically four to six. The exact cutoffs vary by carrier but the broad tiers correspond closely to standard FICO bands. Each tier carries a multiplier on the base premium.

Excellent (740+)
Insurance score range: 740-850
$156/mo
Approximately 25% below national average
Good (670-739)
Insurance score range: 670-739
$208/mo
At national average
Fair (580-669)
Insurance score range: 580-669
$278/mo
Approximately 34% above national average
Poor (under 580)
Insurance score range: 300-579
$385/mo
Approximately 85% above national average

The four states that ban credit-based scoring

California. Proposition 103, passed by California voters in 1988, established consumer protections in auto insurance rating including a prohibition on using credit scores. California carriers must price on driving record, miles driven annually, and years of driving experience as the three primary factors, with secondary factors permitted only if statistically valid. The California Department of Insurance regulates and approves all rate filings.

Hawaii. Hawaii Revised Statutes 431:10C-207 prohibits credit-based insurance scoring. Hawaii carriers must price on driving record and traditional non-credit factors.

Massachusetts. The Massachusetts Division of Insurance prohibits credit scoring in auto rating under longstanding regulation. Massachusetts has a heavily regulated rating system that has historically capped rate variation.

Michigan. Michigan banned credit-based insurance scoring as part of its 2019 auto insurance reform package (Public Act 21 of 2019). Michigan also has unique no-fault PIP rules.

In the four ban states, drivers with poor credit pay less for auto insurance than they would in a credit-scoring state with otherwise equivalent demographics. Drivers with excellent credit may pay slightly more in ban states because the credit-based discount they would receive in a scoring state is unavailable.

The interaction with other factors

Credit-based insurance score is one of several rating factors, not the sole driver of premium. State, age, vehicle, driving record, and claim history all matter. A driver with poor credit and a clean record in Vermont may pay less than a driver with excellent credit and a recent at-fault claim in Nevada. The credit factor is most visible when comparing two drivers identical in all other respects.

Practically, this means a credit improvement campaign should be one of several rate-improvement tactics, not the sole strategy. Combine credit improvement with telematics enrollment, deductible optimisation, carrier shopping at renewal, and discount stacking. The aggregate effect can be substantial: a driver who moves from fair credit to good credit, enrolls in telematics, raises their deductible from $500 to $1,000, and shops to a lighter-pricing carrier can drop their monthly premium by 30 to 50 percent in 12 to 18 months.

Credit-based insurance FAQs

How much does credit score affect car insurance per month?⌄
In states where credit-based insurance scoring is permitted, the swing from excellent credit (740+) to poor credit (under 580) is approximately 2.5x. The national average of $208 per month for excellent credit rises to approximately $385 per month for poor credit, per ValuePenguin and Bankrate 2026 cross-referenced data. For drivers with fair credit (580-669) the average is approximately $278 per month. For good credit (670-739), approximately $234 per month. Credit-based insurance scoring is banned outright in California, Hawaii, Massachusetts, and Michigan.
What is a credit-based insurance score?⌄
A credit-based insurance score is a numerical score derived from your credit report but calculated using a different formula than your FICO score. It uses many of the same inputs (payment history, credit utilisation, length of credit history, account mix, recent inquiries) but weights them differently to predict insurance claim likelihood rather than loan default. The Insurance Information Institute confirms that insurance scores have shown statistical correlation with claim frequency, which is the basis for their use in rating. The two leading providers of insurance scores are LexisNexis and TransUnion.
Which states ban credit-based insurance scoring?⌄
Four states explicitly ban credit-based insurance scoring in car insurance underwriting: California (Proposition 103), Hawaii, Massachusetts, and Michigan. In those states, carriers must price on driving record, age, vehicle, claim history, and other non-credit factors. Maryland, Oregon, Utah, and Washington have partial restrictions on credit use. The remaining 42 states and DC permit full credit-based insurance scoring. A driver moving from a credit-scoring state to a no-credit state who has poor credit typically sees an immediate rate drop; a driver with excellent credit may see a slight increase.
How can I improve my credit-based insurance score?⌄
The actions that improve FICO scores also improve insurance scores. Pay all bills on time, every time. Keep credit utilisation under 30 percent of your total available credit (ideally under 10 percent). Maintain old accounts open even if not actively used. Limit new credit applications. Dispute any errors on your credit report at annualcreditreport.com. Improvements typically take 6 to 12 months to flow through to your insurance score and another 1 to 2 renewal cycles to show up in your premium. The largest gains come from moving up a tier (poor to fair, fair to good, good to excellent).
Why do insurers use credit?⌄
Actuarial studies, most notably the 2007 Federal Trade Commission study and subsequent state DOI analyses, have shown that credit-based insurance scores correlate with insurance claim frequency. Drivers with lower scores file claims more often and for higher amounts on average. The carriers argue this is purely actuarial and not discriminatory; consumer advocates argue it disproportionately impacts lower-income drivers and is a form of redlining. State legislatures continue to debate this; four states have banned the practice, and several others have considered legislation. As of 2026, the practice remains permitted in 46 jurisdictions.
Does shopping for insurance hurt my credit?⌄
No. Insurance quote shopping uses a soft pull on your credit, which does not affect your credit score or appear on your credit report visible to other lenders. You can shop quotes from a dozen carriers in a single afternoon without any credit score impact. This is one of the few areas of personal finance where aggressive shopping has no downside. The hard pull only happens if you actually bind coverage with the new carrier and even then it is typically a soft pull at most carriers.
How often do insurers re-check my credit?⌄
Most carriers re-evaluate the credit-based insurance score at each renewal (every 6 to 12 months depending on policy term). Some use a 24-month or 36-month lookback for the credit component to smooth out short-term credit fluctuations. The Fair Credit Reporting Act requires the carrier to notify you if your rate is being adversely affected by your credit, typically via a written notice with your renewal paperwork. If your credit has improved meaningfully (a 50+ point jump), request a mid-policy credit re-evaluation; some carriers honour the request and apply an immediate rate reduction.

Related

California (credit ban)
$221/mo avg, no credit scoring
Michigan (credit ban)
$246/mo avg, no-fault state
Clean record per month
Driving record contribution
After switching providers
Credit re-scoring at quote time