Why does your fico score impact your insurance rate?

My rate is higher than I think I should pay and one of my friends told me that it is probably because my credit score is low. Why does that matter?

Feb 22, 2017 Palmdale, CA

Neil Richardson

Feb 22, 2017

A credit score is a section of the overall "insurance score" that partially determines your insurance premium. The reason credit is used to determine rates in most states is due to the correlation between a driver's score and their likelihood to file a claim. Credit is not used in California to determine car insurance rates, though, so this is not something that will help or hurt in your state. If your rate is high, you should consider shopping around for a new policy. Comparing rates with as many companies as possible will ultimately lead to the best option if you're unhappy with your rate.

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