What Is an\u00a0Auto Insurance Score? Put simply, this is a number\u2014usually ranging between 300 and 900\u2014that predicts the likelihood of whether or not you\u2019ll end up making an insurance claim. The lower it is, the stronger the possibility you\u2019ll file a claim. Even though it does partially rely on your credit score, the two scores are not the same. Most insurers and consulting companies take these factors into consideration when determining your\u00a0car insurance score: \tYour overall profile, as well as your driving and claims record \tYour credit rating This score is not an officially recognized insurance metric, and each company has its method of calculating it. Nevertheless, it is directly linked to your premium. The higher you score, the less you\u2019ll pay. Keep in mind that when certain insurers also use the term \u201ccredit-based\u00a0auto insurance score,\u201d your score is based entirely on your credit rating. \tInsurance vs. Credit Scores: What\u2019s the Difference? \tWhat Is a Good Auto Insurance Score? \tHow to Improve Your Insurance Score Level \tWhy Does My Auto Insurance Score Matter? \tWhat Factors Can Affect an Insurance Score? \tFrequently Asked Questions Insurance vs. Credit Scores: What\u2019s the Difference? A credit score is a number that represents your ability to repay the money you have borrowed. It\u2019s based on your annual income, previous late payments, job history, and other items. According to the\u00a0NAIC\u2019s recent research, and based on FICO\u2019s data, approximately 95% of\u00a0auto insurance\u00a0companies use your\u00a0credit score\u00a0when calculating premiums. For instance, major insurers, such as Progressive and Nationwide, openly admit on their websites that they rely on credit scores when determining rates. Most often, instead of looking at your credit report, an insurer will acquire the information from reputable credit repositories such as TransUnion, Equifax, and Experian. Insurance companies employ this practice because there is\u00a0a strong statistical correlation\u00a0between a low credit score and the chances of you filing a claim. However,\u00a0while your\u00a0car insurance score\u00a0relies on your credit rating, there are more factors in this equation.\u00a0Specifically, insurance companies use additional data\u2014like your age, driving experience, the model of your car, etc.\u2014to finalize your quote. Keep in mind, there\u2019s no official method for every company to use while calculating their premiums. It\u2019s also worth noting that basing rates on one\u2019s credit score is prohibited in Massachusetts, Hawaii, and California. What Is a Good\u00a0Auto Insurance Score? This will depend on the analytics company that does the actual scoring. Nonetheless, it\u2019s safe to say that anything above 750 will get you an affordable car insurance rate. The score that the\u00a0Fair Isaac Corporation (FICO)\u00a0assigns ranges from 300 to 900. However, keep in mind that every insurer interprets an\u00a0insurance score scale\u00a0differently, and these scores are not official. Still, there\u2019s a significant chance that if your score is high, you\u2019ll be able to buy cheap car insurance. The results above 700 are always considered good, while any rating higher than 800 is excellent. If\u00a0ChoicePoint\u00a0compiled the rating, the score would range from 300 to 997. The good ratings usually start at 750, while anything above 800 indicates you\u2019ll get low premiums. Finally, there\u2019s a\u00a0TransUnion\u00a0insurance score\u00a0in addition to these. This one is based on your credit rating, and it goes from 200 to 997, with anything over 770 representing very good results. You can get it for free\u00a0on CreditKarma\u2019s website. How to Improve Your\u00a0Insurance Score Level Since your insurance rating is based on two parameters\u2014your credit score and your driving profile\u2014improving each requires a different approach. Your credit rating can be improved by doing the following: \tAvoid opening new credit card accounts. \tDispute any errors in your credit report. \tDo not make new purchases using credit card loans. \tPay off any past debt. Additionally, if you want to belong to the best\u00a0car insurance rating tiers, you should try to accomplish the following: \tGet additional driving training. \tChoose a safe, inexpensive, and reliable car model. \tTry to avoid getting any driving violations. \tConsider moving to a less expensive zip-code. \tDrive less often, or at least avoid traffic jams. Why Does My\u00a0Auto Insurance Score\u00a0Matter? Every insurer has a unique strategy and will assess specific parameters differently. But in the end, if there\u2019s strong evidence that certain factors might raise the chances of you making a claim, every company will take notice. Otherwise, having a high claims expense to a low premium ratio would put them out of business. That\u2019s why\u00a0insurance scores\u00a0are a firm indicator of what premiums you\u2019re likely to pay. In addition to getting your score estimates, getting quotes from multiple insurers is the most direct way to figure out your premium. Each company has a different market approach, meaning prices can vary substantially. Besides getting as many quotes as possible, it\u2019s also smart to check\u00a0auto insurance reviews. By reading them, you\u2019ll see how each insurer scores in crucial departments such as financial strength and customer service. What Factors Can Affect an\u00a0Insurance Score? Underwriting is mostly based on drawing conclusions from statistical data on previous losses. This means that insurance companies compile and update a list of factors that determine whether or not an applicant will be a\u00a0high-risk driver. They then check your profile to see where you fit when you apply for coverage. As far as your credit rating is concerned, the following items may affect\u00a0insurance scoring\u00a0when you get a quote: \tPayment history, especially if there are late payments and delinquencies \tOutstanding debt\u2014i.e., how much debt you have at the moment \tThe length of your credit history \tAny new credit applications \tWhat kinds of credit you currently have When insurance companies take your driving history and profile into account, they\u2019ll look at the following items when making an\u00a0auto insurance score calculation: \tPrevious violations, such as speeding tickets, at-fault, or DUI citations \tYour claims history \tYour age and driving experience \tThe vehicle you drive and how many miles you drive \tYour zip-code \tGaps in your insurance history Conclusion The majority of online scores are based on your credit rating. However, when you get a quote, insurance companies take other factors into consideration too. That\u2019s why it\u2019s even more prudent to get quotes from as many insurers as possible instead of worrying about where you stand on the\u00a0insurance score chart. While there\u2019s no universally accepted way to determine your score, any estimate you can get from the major agencies will be a reliable indicator of how much you\u2019ll need to pay for car insurance. That\u2019s why it\u2019s beneficial to do a quick online check. With this in mind, you can learn first-hand how much a driver with your profile needs to pay Frequently Asked Questions 1. Is 840 a good\u00a0car insurance score? Yes, it is. This score represents a preferable client among the ranking systems of every notable insurance analytics company. With a score this high, you\u2019re bound to be offered some of the lowest premiums on the market. 2. Do insurance companies check your credit score? Yes, about 95% of auto insurance companies use a\u00a0credit-based insurance score. They do this because there\u2019s a firm statistical link between a low credit score and an increased likelihood of making a claim. However, laws in Hawaii, California, and\u00a0Massachusetts\u00a0prohibit using your credit rating while determining premiums. 3. Can you get car insurance with bad credit? Yes, although it will be considerably more expensive. Some states, such as\u00a0Tennessee, even have a special program for drivers who have a hard time finding an insurer. If your\u00a0insurance score\u00a0is low and a couple of insurance companies have rejected you, you may enter the program. In it, you\u2019ll be randomly assigned to an insurer. However, it\u2019s still prudent to shop around. It might turn out there\u2019s an insurer willing to take you on, and you\u2019ll pay a substantially lower premium if you don\u2019t go through this kind of program. 4. How is an\u00a0insurance score\u00a0calculated? No two insurance companies use the same method to make these calculations. Nonetheless, the majority of them will look at your credit reports to determine your rates. Additionally, they\u2019ll look at direct underwriting factors, which have an obvious link to your likelihood of making a claim. These include your driving record, a lapse in insurance, the make and model of your car, your location, and your age and driving experience. 5. What\u2019s a good\u00a0auto insurance score\u00a0range? Anything above 750 is widely accepted as a good insurance score no matter which company did the rating. Additionally, anything above 800 is considered an excellent result, meaning you will be able to buy quite affordable car insurance coverage. 6. Will my credit rating be affected by my\u00a0auto insurance score? No. Once an insurance company or their representative obtains your credit report, an inquiry will be added to your record. However, these inquiries do not affect your credit rating, and they aren\u2019t supplied to potential lenders.