If you don’t want to pay extra for car insurance, you must think about your credit score—because it can affect your car insurance rates dramatically and very differently with different insurance companies.
For instance, drivers who have excellent credit scores—say, 720 or above—may save money with Farmers Insurance and Progressive. These insurance companies place particular emphasis on credit scores, according to research by the financial website WalletHub.com.
A driver who has an excellent credit score might be quoted a rate 60% below the rate offered to someone who has a similar driving record but a poor credit score. These quotes for high-credit-score drivers will often—though not always—be the lowest rates available.
Those drivers who have poor credit scores—say, 620 or below—might benefit from getting quotes at Geico, which tends to place far less emphasis on credit scores.
For drivers with midlevel credit scores—above 620 but below 720—the scores generally have less effect on the rates that insurers quote.
Auto insurers are not allowed to consider credit scores in California, Hawaii or Massachusetts, and they tend not to put much emphasis on credit scores in certain other states, including Connecticut and Iowa.
States where auto insurers generally put the greatest emphasis on credit scores include Maine, Michigan, New Jersey, Pennsylvania, South Carolina, Tennessee and Virginia.
Take a look at Wallet Hub’s “2015 Study: How Credit Scores Impact Car Insurance Costs by State” for more details about insurers’ credit-score habits.