What Is an Insurance Score, and How Does It Affect Your Rate?
Updated: Oct 9
Two neighbors in Douglasville drive the same car, have clean records, and live on the same street. One pays noticeably more for auto insurance. Often the difference is a number most people have never heard of: the credit-based insurance score.
What Is an Insurance Score?
An insurance score is a number many insurers use to help predict how likely someone is to file claims. It's built from information in your credit report, but it isn't the same as the credit score a lender uses for a mortgage or car loan. Insurers' data has shown a statistical link between how people manage credit and how often they file claims, so many carriers use it as one rating factor for home and auto insurance.
What Goes Into It
Payment history: On-time payments help; late payments and collections hurt.
Outstanding debt: High credit card balances relative to your limits can lower your score.
Length of credit history: A longer history generally helps.
New credit applications: Opening many new accounts in a short time can hurt.
Credit mix: A healthy mix of account types can help.
Things like your income, race, religion, gender, and address are not part of an insurance score.
How Georgia Regulates It
Georgia allows insurers to use credit-based insurance scores, with consumer protections. For example, credit generally can't be the only reason an insurer declines, cancels, or nonrenews your policy, and if your credit information leads to a worse rate, the insurer must tell you. Each carrier weighs credit differently, and some weigh it more heavily than others.
Why It Matters So Much
The difference between a strong and weak insurance score can add up to real money every year on both your home and auto policies. That's also why switching carriers can help: one company may weigh credit heavily while another puts more weight on your driving record or claims history.
How to Improve Your Insurance Score
Pay every bill on time. Autopay helps.
Keep credit card balances low, ideally under 30% of your limits.
Avoid opening several new accounts at once.
Keep older accounts open when it makes sense.
Check your credit reports for errors at AnnualCreditReport.com and dispute mistakes.
Improvements take time, but they can lower your premiums at your next renewal or when you re-shop.
Does Getting Quotes Hurt My Credit?
No. Insurers typically use a soft inquiry for quotes, which doesn't affect your credit score. Shop as often as you like.
Credit and New Businesses
Starting a business? Many commercial auto insurers also look at the owner's credit, especially when the business has no track record. See how one new owner's credit helped his rate in Hotshot Trucking Insurance in Georgia: Marcus's Story.
Frequently Asked Questions
Is an insurance score the same as my credit score? No. They use similar data but are calculated differently for different purposes.
Can I get insurance with bad credit? Yes. Some carriers weigh credit less heavily, which is a big reason to compare.
Do you help clients in Rome and Haralson County? Yes. We serve clients across Georgia.
Find the Carrier That Fits Your Situation
Hometown Insurance Group Jimenez Agency compares 12+ carriers so you aren't stuck with the one that weighs your credit the hardest. Hablamos español. Call 678-525-7607 or request a quote at myagentvictor.com.
Comments