Coverage basics
Do Car Insurance Quotes Affect Your Credit Score?
Quick answer
Generally, no. According to Experian, insurers use a soft inquiry when they check credit for a car insurance quote, and soft inquiries do not affect credit scores. However, where state law allows, insurers may use a credit-based insurance score to help set your price, so your credit history can still influence the quotes you receive.
Key takeaways
- Car insurance quotes generally use soft inquiries, which do not affect credit scores.
- A credit-based insurance score can still affect your price where state law allows.
- Some states, such as California, Hawaii and Massachusetts, ban or limit the use of credit in auto pricing.
- If credit information leads to a worse rate, you generally have a right to be told.
Many drivers put off comparing car insurance because they worry that every quote will ding their credit score. It is a fair concern, given how much a credit score matters for loans and credit cards. The good news is that insurance quotes are generally handled differently from credit applications. The more nuanced news is that your credit history can still affect the price you are quoted, depending on where you live.
Do car insurance quotes count as hard inquiries?
Generally, no. Experian explains that when an insurer checks your credit for a quote, it uses a soft inquiry. Soft inquiries do not affect your credit scores, and lenders reviewing your credit report do not treat them as a sign that you are seeking new credit.
In practice, that means you can usually compare several car insurance quotes without worrying about your score. You may see these inquiries when you review your own credit report, but they are listed separately from hard inquiries and are not factored into the scores lenders see.
What is the difference between soft and hard inquiries?
| Feature | Soft inquiry | Hard inquiry |
|---|---|---|
| Typical reason | Insurance quotes, checking your own credit, preapproved offers | Applying for a loan, credit card or other financing |
| Affects credit scores? | No | Can, usually by a small amount for a limited time |
| Seen by lenders? | Generally not | Yes |
| Requires a credit application? | No | Yes |
If you are ever asked to sign a separate financing agreement to pay your premium, ask whether it involves a credit application and a hard inquiry. A standard insurance quote is not a loan application.
What is a credit-based insurance score?
Even though a quote does not lower your credit score, your credit information can still influence your premium. Many insurers use a credit-based insurance score. It is built from information in your credit report, but it is designed to help predict insurance claims rather than whether you will repay a loan.
An insurance score is not the same number a lender sees. It typically draws on items such as payment history, amounts owed, length of credit history and recent applications for credit. How much weight it carries varies from insurer to insurer, which is one reason quotes for the same driver can differ so much.
Which states restrict the use of credit in car insurance?
Insurance is regulated at the state level, and so is the use of credit. Some states, such as California, Hawaii and Massachusetts, ban or limit the use of credit information in pricing auto insurance. Other states allow it but set conditions, for example limiting whether credit alone can be the reason for a cancellation or non-renewal.
Because these laws change, check with your state insurance department for the current rules where you live.
What rights do you have if credit affects your rate?
Under the federal Fair Credit Reporting Act, if an insurer takes an adverse action based on information in your credit report, such as charging you a higher rate, it generally must tell you. The notice should name the credit bureau that supplied the report and explain that you can request a free copy and dispute errors.
Some practical steps:
- Review your credit reports regularly through AnnualCreditReport.com and dispute any mistakes.
- Pay bills on time and keep balances manageable. Improvements take time to show up.
- If you have been through a major life event, such as a serious illness or job loss, ask whether your state lets insurers make exceptions for extraordinary circumstances.
- When your credit improves, ask your insurer whether and when it will re-check your insurance score.
So should you worry about comparing quotes?
For most drivers, no. Comparing quotes is not the same as applying for credit, and soft inquiries do not lower your score. The more useful question is how your credit history affects your price, and you can only see that by comparing quotes from different insurers, since each one uses the information differently.
When you compare, request the same coverage in every quote. Our guide to the declarations page explains how to use your current policy as a template.
For a rough premium estimate, try our cost calculator. When you are ready, the free rate check takes about a minute and is built for drivers who already have insurance.
Frequently asked questions
Do I have to give my Social Security number to get a quote?
Not always. Some insurers ask for it to match your credit and driving records more accurately, while others can quote using your name, address and date of birth. Requirements vary. If you prefer not to share it, ask whether the quote may be less accurate or whether the final price could change later.
Will getting many quotes in one week hurt my credit?
Generally, no. Insurance quotes are typically recorded as soft inquiries, which do not count toward your credit scores no matter how many there are. That is different from applying for several loans or credit cards, which can create hard inquiries. Review your own credit report if you want to see how inquiries are listed.
Can better credit lower my car insurance premium?
In states that allow insurers to use credit information, an improved credit history may lead to a better credit-based insurance score over time, which could affect your price. Results vary by insurer, and not every insurer re-checks credit at every renewal. Ask your insurer whether and when it updates your insurance score.