Our take in 10 seconds
Unless you live in California, Hawaii, or Massachusetts (or drive under Michigan's restrictions), your credit is priced into your auto premium — and the swing between poor and excellent credit tiers is often bigger than the penalty for an at-fault accident. Two consequences: if your credit has improved since you bought your policy, re-quote now, because your current insurer won't volunteer the discount. And every point of credit improvement quietly pays you twice — once in loan rates, again in premiums.
How it works
The score your insurer uses isn't quite your FICO
Insurers use a credit-based insurance score — built from the same credit report as your FICO, weighted differently. Payment history and utilization dominate; income and driving record aren't in it at all (driving is priced separately). The actuarial argument is that credit behavior correlates with claim frequency; the practical reality for you is simpler: the same file that prices your loans prices your premium.
Two things it's not: it's not a hard pull (quoting has zero effect on your credit score, ever), and it's not a yes/no gate — nobody is declined for bad credit, they're just quietly charged more. Which is worse, because a denial gets your attention and an overcharge doesn't.
The damage
What the credit tiers roughly do to a premium
Excellent credit~760+
Baseline
Good credit~670–759
~10–25% more
Fair credit~580–669
~25–60% more
Poor creditunder 580
Up to ~2× baseline
Ranges are illustrative of industry-wide patterns; the actual spread varies significantly by state, carrier, and profile — which is exactly why quoting multiple carriers matters more when your credit isn't excellent.
The part nobody tells you: each carrier weighs the insurance score differently. Carrier A might charge fair credit 20% extra while Carrier B charges 50% — same driver, same car. That spread means shopping around pays the most for exactly the people being charged the most. Excellent-credit drivers can be lazy about quoting; fair-credit drivers can't afford to be.
What to do
Three moves, in order
1. Re-quote if your credit improved since you bought the policy. Insurers rate your credit when you apply and at renewal reviews — but they're not eager to reprice you downward. If your score has climbed 40+ points since your policy started, quotes with your current credit will often beat your renewal. Fifteen minutes, soft pull, no obligation.
Credit improved since your last quote? Re-run the numbersFarmers quotes auto, home, and renters online — bundle pricing shows up right in the quote flow.
Get a Farmers Quote Online →Paid partner link · WiseIQ earns a commission on completed online quotes. Availability and pricing vary by state. Coverage terms are set by Farmers and its underwriters.
2. Quote at least three carriers, because the fair-credit spread is huge. Add the bundle math if you own a home, or the renters version if you rent — the multi-policy discount stacks with everything on this page.
3. Fix the file that's pricing you. The same moves that raise your FICO raise your insurance score: utilization below 30%, zero new lates, disputing report errors (they're priced into your premium too). The credit-building sequence pays double here — every tier you climb cuts your loan costs and your premium at the next renewal.
If your credit took a recent hit: some states require insurers to consider "extraordinary life circumstances" — job loss, divorce, medical events, death of a spouse — on request. It's an ask-for-it exception, not automatic. One phone call to your carrier can undo a credit-driven surcharge if the cause qualifies.
Who gets paid on this page
Farmers Insurance — if you complete an online quote through our linkpays us a commission
Every other insurer discussedpays us $0
You — quoting is free, soft-pull, and we just told you when your current insurer is the better deal$0
Frequently asked questions
Which states don't allow credit scores in car insurance?
California, Hawaii, and Massachusetts prohibit credit-based pricing for auto insurance, and Michigan heavily restricts it. Everywhere else, insurers can and almost universally do use a credit-based insurance score as a rating factor.
Does getting car insurance quotes hurt your credit score?
No. Insurance quoting uses a soft inquiry, which never affects your credit score no matter how many carriers you quote. The "shopping around will hurt my credit" worry — reasonable for loans — simply doesn't apply to insurance.
How much more do you pay for car insurance with bad credit?
Industry-wide patterns put poor-credit drivers at up to roughly double the premium of excellent-credit drivers for identical coverage, with fair credit commonly 25–60% above baseline. The exact spread varies by state and carrier — which is why multi-carrier quoting matters most for lower credit tiers.
Will my insurance go down if my credit score goes up?
Not automatically. Carriers rerate at renewal at their own discretion and rarely rush to lower your bill. The reliable way to capture an improved score is to re-quote the market yourself and either switch or use the quotes to ask your carrier to rerate.
Is it legal for insurers to use credit scores?
In most states, yes — it's a regulated, disclosed rating factor, and insurers must typically notify you of adverse credit-based pricing decisions. Several states ban or restrict the practice, and the rules evolve, so check your state's insurance department if you're unsure.