The Credit Score Your Insurer Uses Isn't Your FICO

“A CBIS isn’t the same as a FICO score, but it draws on many of the same factors: payment history, outstanding debt, length of credit history, new credit inquiries, and credit mix,” explains Beth Swanson, insurance analyst with The Zebra. “It might be surprising, but there’s a correlation between lower credit scores and higher claims risk. Because of that, most states allow insurers to factor your score into underwriting and pricing, and it’s one of several factors (like your driving record, ZIP code, or claims history) that shape your final premium.”

FICO reports that 95% of auto insurers use credit-based insurance scores when determining an applicant’s risk in states that permit the use of these scores.^[1]

Why States Are Starting to Push Back

Currently, California, Hawaii, Massachusetts, and Michigan prohibit or significantly restrict the use of CBIS information when pricing auto insurance. Maryland, Utah, and Oregon have certain limitations or restrictions on how credit can be used. Legislation has been introduced recently in other states that either ban or limit the use of non-driving factors to calculate insurance rates, like credit score. For example, West Virginia recently introduced a bill to ban credit scores across all personal lines of insurance, while Rhode Island introduced a bill to prohibit considering credit history in auto insurance rates before holding the bill for further study.^[5],[6]

“Iowa had a bill introduced in early 2026, but it died in committee in May. New York, Oklahoma, and Pennsylvania all have active bills right now,” Swanson adds.^[7] “This demonstrates that, as affordability continues to be a concern for people, states are showing more interest in limiting some of those non-driving factors that have traditionally been part of underwriting.” 

CBIS supporters argue that these insurance scores have a statistical relationship with claim frequency and allow insurers to price risk more accurately. 

“They also believe that removing this factor could increase premiums for policyholders whose credit currently qualifies them for lower rates,” says Dennis Shirshikov, a professor of finance and economics at City University of New York/Queens College. “But critics argue that credit has nothing to do with driving ability, can penalize people following a medical emergency or job loss, and can disproportionately affect lower-income communities.”^[8]

What's Next for Credit Score Bans?

The momentum isn't slowing down. As car insurance costs remain a top concern for drivers across the country, more states are likely to take up this issue in 2027. If you live in a state that still allows credit-based insurance scoring, the rules could change in the coming years. The easiest way to stay in the loop is to look at your state's department of insurance website. In the meantime, improving your credit is one of the best things you can do for your insurance rate if your state still allows it as a factor. If your credit has gotten better recently, it might be a great time to get new quotes and avoid paying more than you need to.

What You Can Actually Do About It

To improve your CBIS and, ideally, pay less for car insurance, here’s what the experts recommend:

• Dispute errors with your score. Under the Fair Credit Reporting Act, you can dispute inaccurate information with Equifax, Experian, and TransUnion for free. "Errors can be challenged with each credit bureau online or by mail, and after the bureau corrects its report, ask your carrier to re-rate your policy using the updated information," says Janet Ruiz, director of Strategic Communication for the Insurance Information Institute. If you've received an adverse action notice, request a free consumer disclosure report from LexisNexis to see exactly what data was used in your score calculation.^[9]
• Manage debt responsibly. Pay your bills on time and in full whenever possible, and avoid maxing out your credit cards or using too much of your total spending limit.
• Ask about your insurance score. “These scores are not always made available to consumers in the same way as ordinary credit scores. But you can ask your insurer or agent whether a score was used and request the score, the primary reason for the score, or any adverse action notice associated with their pricing decision,” advises Shirshikov.
• Shop around among different carriers. “A different company can weigh your credit differently, and in many cases strategies like bundling policies, adjusting deductibles, or completing a safe driving program can also reduce your rate,” Kovar says. Use The Zebra’s convenient comparison tool to compare real quotes side-by-side.