What is My Insurance Score?

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What is My Insurance Score?

 An insurance score, also called an insurance credit score, is a numerical point system based on select credit report items. There is no direct relationship to financial credit scores used in lending decisions, as insurance scores are not intended to measure creditworthiness, but rather to predict risk. Insurance companies use insurance scores to partially determine charges for premiums. Insurance scores are applied in personal product lines, namely homeowners and automobile insurance, and typically not elsewhere.

Insurers consider credit report information, along with other factors, such as driving experience, previous claims and vehicle age, to develop a picture of a consumer’s risk profile and to establish premium rates. Each insurer has a different way of calculating this information, but in general, the better your credit report, the better your rates.

Determining an Insurance Score 

In most cases, the biggest factors affecting your insurance rates are your accident and insurance claim history and your credit report. Values are assigned to each predictive factor, and the values are then added together to determine your insurance score. This is an instance where you want to come out on the bottom… the lower the score, the lower the risk. An insurance company will not deny you coverage based on this score. If it’s high, you’ll end up with higher rates, but you won’t necessarily be turned away.

Factors that Impact Insurance Score 

So, what types of factors from your credit report affect your insurance score?

Favorable Factors


  • Long-established credit history
  • Low use of available credit
  • Open accounts in good standing
  • No late payments
  • No past-due accounts


Unfavorable Factors


  • Short credit history
  • Collection accounts
  • High use of available credit
  • Past-due payments
  • Numerous recent applications for credit


Can I Change My Insurance Score? 

You can change your insurance score by keeping your credit report in good standing. Pay mortgage and loan payments on time, keep credit accounts up to date and avoid taking out numerous credit applications in a short period of time. Also keep a fair amount of available credit open. By doing this, you’re not only lowering your insurance score, but also saving money by getting more competitive rates.


Want to know more?  See what Erie Insurance Group has to say about Insurance Scores. http://auto.erieinsurance.com/insurance-scoring-know.aspx

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