 TITLE: Why Do Auto Insurance Companies Consider Your Credit? CONTENT: How Does Your Credit Score Affect Your Insurance Rate?\n------------------------------------------------------\nThe types of credit scores that lenders and credit card issuers use to evaluate your creditworthiness won't affect your insurance rates. These scores, including many FICO® Scores☉ and VantageScore® credit scores, are created to help creditors predict the likelihood that a credit applicant will miss a payment. They might impact your ability to get a loan or the interest rate you'll receive, but they're not used for insurance purposes.\nFICO, LexisNexis and other companies also create credit-based insurance scores. Similar to general credit scores, credit-based insurance scores are largely based on your credit report from one of the major credit bureaus—Experian, TransUnion or Equifax. However, credit-based insurance scores are generally built to help insurance companies understand the likelihood that someone will file insurance claims that cost the company more than it collects in premiums.\nFactors that influence your credit scores can also affect your credit-based insurance scores. These include whether you made past payments on time and your current debt balances. If you have poor credit, you may have a harder time getting approved for an auto insurance policy or may have to pay more in premiums.\nHowever, insurance companies generally can't make a decision based solely on your credit—it's only one of many factors. Additionally, some states ban or strictly limit the use of credit-based insurance scores for use in auto insurance decisions. END