What Is An Auto Insurance Score?

Couple driving in a car

Your auto insurance score, also called a credit-based insurance score or an auto insurance credit score, measures how likely you are to file an insurance claim. Drivers who file fewer claims cost insurance companies less money and represent a lower insurance risk, so insurance companies use available data to determine which candidates have the lowest probability of filing a claim. To simplify that evaluation, specialized reports distill the relevant data into a number—the auto insurance score.

In other words, where credit scores rate a borrower’s creditworthiness, an auto insurance score rates an applicant’s coverage worthiness.

While your credit-based insurance score is not as widely influential as your credit score, it can still determine whether your application for car insurance will be approved as well as the car insurance rates and premiums you’ll be expected to pay. Higher scores translate to more approvals and lower insurance rates, saving you money.

Here’s everything you need to know about your auto insurance score: what it is, how it’s calculated, how to check it and how to improve it if it’s not as high as you’d like.

How Your Auto Insurance Score Is Calculated

Auto insurance scores take eight factors into consideration:

  1. Negative public records, like foreclosures
  2. History of late payments
  3. Length of credit
  4. Number of hard credit inquiries
  5. Number of credit accounts
  6. Number of open installment loans
  7. Types of credit
  8. Credit utilization ratio

You may recognize many of these as being determinants of your credit score. What makes your credit-based insurance score different, though, is that it also takes into account your driving record and claims history to determine your auto insurance score.

Graphic: Research shows that credit-based insurance scores can effectively predict both the number of claims drivers file and the total cost of those claims.

Though auto insurance scores incorporate a broad range of personal information, there are many data points that are off-limits and will never be included in your auto insurance score:

  1. Race, ethnicity and nationality
  2. Religion
  3. Gender identity
  4. Marital status
  5. Home address or zip code
  6. Income, occupation and employment history
  7. Medical debt
  8. Bankruptcies older than seven years

While these factors can’t be used to determine your auto insurance score, they may be considered during the insurance company’s evaluation of your insurance application.

Your score will be calculated differently depending on which provider it comes from. There are three main agencies that provide auto insurance scores: the Fair Isaac Corporation (FICO), LexisNexis and TransUnion.

How It’s Used

Your auto insurance score is just one factor that insurance providers consider when evaluating whether or not to offer you coverage and how high your insurance premiums will be. Other factors an insurance provider may consider include:

  1. Driving history
  2. Accident and claims history
  3. Vehicle age, make, model and color
  4. Zip code
  5. Gender and age
  6. Marital status
  7. Occupation
  8. Previous insurance coverage
  9. Annual mileage

Some states limit the information that car insurance companies can access when assessing an application. California, Hawaii and Massachusetts prohibit insurance providers from using credit scores in their approval or quotes processes. 

Graphic: People with no credit pay an average of 67% more for car insurance than people with excellent credit.

The Three Major Providers

Credit-based insurance scores vary depending on which of the three major providers the insurer chooses to use.

FICO Auto Score 9 XT

FICO draws its data from TransUnion, which is one of the three primary credit bureaus responsible for traditional credit reporting. Its auto insurance scores range from 250 – 900, and its algorithm places special emphasis on borrowing habits that matter to auto lenders, like whether you’ve increased your overall debt in recent months.

The FICO Auto Score 9 XT also places stronger weight on the individual’s past 30 months of behavior, so those with a checkered borrowing history who have made improvements in the year prior will benefit from the FICO algorithm.

LexisNexis Attract Auto Insurance Score

LexisNexis is a smaller credit reporting agency that specializes in industry-specific credit reports, including auto insurance scores. Its data is pulled from Equifax reports and its scores range from 500 to 997. 

When an auto lender orders an auto insurance score from LexisNexis, the report generated can include the borrower’s full credit report or just excerpts, and it can also include an analysis from the provider.

TransUnion CreditVision Auto Score

Unlike FICO and LexisNexis, TransUnion is one of the three major credit bureaus and also happens to provide credit-based insurance scores. TransUnion’s auto scores range from 300 to 850 and are, naturally, pulled from TransUnion’s own credit data.

Like other scores, CreditVision pulls data on past payment history and borrowing behavior, offering over five years of account patterns as well as thorough details on the 30 months of history leading up to the generation of the report. 

Graphic: The states where credit most impacts auto insurance premiums are New Jersey, Virginia, Michigan, Arizona, Texas, and Wisconsin

What’s a Good Auto Insurance Score?

Since the three major auto insurance scorers utilize different score ranges, a good score will vary depending on which bureau is issuing it. Generally, an auto insurance score of 770 or higher indicates that a borrower is a low-risk candidate for coverage, and will typically merit the borrower higher approval ratings and lower premiums.

Can I Check My Score?

Unfortunately, auto insurance scores aren’t accessible for free in the way that credit reports are. However, you can order your auto insurance score from the provider of your choosing.

But while auto insurance scores aren’t free, they also aren’t nearly as important to check as credit reports are. Firstly, auto insurance scores don’t matter unless you’re planning on enrolling in or renewing an auto insurance policy. If you don’t own a car and aren’t in the market, there’s no reason to be concerned about your auto insurance score.

And secondly, even if you’re in the market for auto insurance, you don’t necessarily need to check your score directly. The factors that determine your auto insurance score overlap significantly with credit score factors, so you can often assume that if your credit score is healthy, your auto insurance score is, too.

How to Improve Your Auto Insurance Score

Graphic: Credit Score vs. Auto Insurance Score

If you do check your credit score and find out it’s lower than you’d like (or if you apply for auto insurance and don’t receive the result you’re hoping for), there are a few ways you can raise your auto insurance score.

  1. Improve your credit score. The factors that influence your auto insurance score are largely the same as those that determine your credit score, so if you have bad credit, your auto insurance score will suffer. Raising your credit will improve your auto insurance score as well.
  2. Establish credit. If your problem is that you don’t have credit or your credit history is relatively short, focus on establishing credit by borrowing responsibly across a diverse range of accounts and keeping your credit utilization ratio low.
  3. Ensure your credit reports are accurate. According to the Consumer Finance Bureau, one in five people has an error on at least one of their credit reports. If you maintain healthy financial habits but your scores are low, ensure there are no mistakes on your credit report.
  4. Consider non-credit factors. Remember that auto insurance scores are just one of several factors insurers consider when making decisions. If your auto insurance results are disappointing, the cause may lie outside the realm of your auto insurance score. Contact your insurance provider to learn more about how your insurance premiums and other items are determined.

Since auto insurance scores are less commonly discussed than credit scores and aren’t free to order like credit reports, they can seem more confusing or complicated. But by maintaining the same financially healthy habits required to improve your credit, you can be more confident that your auto insurance score will be in good shape. 

If your finances aren’t as healthy as you’d like, you can figure out where to start making improvements by getting a free credit report consultation and summary of the positive and negative elements of your credit report. Getting a better perspective on the status of your credit will give you a solid foundation for making a plan to improve your finances, credit and auto insurance score, too.