MoneyLife

What Is My Auto Insurance Score?

By Lindsey Ryan

You might not realize it, but your auto insurance score can influence a lot of things. Whether you’re considering purchasing a car and researching insurance options, or you’re trying to understand how your current insurance payment is calculated, knowing your auto insurance score can help.

Insurers use this number as part of the calculation when deciding your auto insurance payments, and it directly factors into your auto insurance rate. Having a better understanding of how auto insurance scores work and what factors can help you attain a better rate and save you money down the line. 

In this article, we’ll break down how auto insurance scores work, the advantages and disadvantages of an auto credit score, and how to improve your auto insurance score.

How does an auto insurance score work?

Your auto insurance score is essentially a way for insurers to try to predict the future when it comes to your car insurance policy. Car insurance is necessary for owning a vehicle, and a car insurance score is part of the process when applying for an auto policy.  

It is used as a method to calculate the likelihood of you getting into an accident or having to fill out a claim. Auto insurance scores, or car insurance scores, are used as a way to decide rates based on your history. It helps insurers set rates for your auto policy. Your car insurance score is a number based on various factors, but the primary source of information is your credit history, which makes up the bulk of the score. 

Where can I find my auto insurance score?

Auto insurance scores can only be requested when you apply for an auto insurance policy. However, monitoring your credit score can help you better predict whether your auto insurance score will be high or low. 

Members that are a part of MoneyLion Credit Builder Plus have access to 24/7 credit score monitoring, which allows for a more accurate prediction on whether your auto score is high or low based on real-time credit reporting. 

How are auto insurance scores calculated?

Your insurance credit score is calculated based on information available in your credit report, accident history, and insurance history, including previous claims. 

Other factors can include your age and your ZIP code, as well as the car’s make and model. The insurance credit score calculation applies to both used car insurance and insurance for a new car, so it’s just one calculation during the auto policy process.

Can I improve my auto insurance score? 

The best way to improve your auto insurance score is by way of your credit score. The higher your credit score, the more positive of an impact it will have on your auto insurance score. 

For both used car insurance and new car insurance, improving your credit score can significantly influence your auto insurance for the better. You can boost your credit score in a variety of ways like paying your bills on time, reducing outstanding balances, and being a safe driver. These are just a few ways of improving your auto insurance score, which will ultimately allow you to get a better rate.

What is a good car insurance score?

Generally, a car insurance score of at least 700 is considered good. Anything above 700 is even better. 

Do all auto insurance companies check credit?

Yes, almost all insurance companies will check your credit before issuing an auto policy. That is why improving your credit as you practice safe driving is very important when trying to raise your auto insurance score. Most places don’t use an auto insurance score to issue an auto policy, so your credit history will count for a lot. 

Currently, California, Hawaii, and Massachusetts are the only states that prohibit insurers from using credit scores as part of their calculations. Instead, auto insurance scores in those states are based on your driving history and the total numbers of miles you’ve driven, among other factors.

That’s why boosting your credit score is so important if you want to get the best possible rate for your auto insurance. There are a lot of ways you can increase your credit score, including a MoneyLion Credit Builder Loan®️ to establish monthly payment reporting. 

You can use the MoneyLion Credit Builder Loan to help increase a low credit score since a hard credit check isn’t required. You can also receive up to $1,000 in same-day funding, so it’s an easy solution that can help you significantly increase your credit score. Avoiding late payments is one of the best ways to improve your credit score, and it has a domino effect on improving your auto insurance score. Members have seen their credit score increase within 60 days of utilizing a MoneyLion Credit Builder Loan.

Advantages of an auto insurance score

The main advantage of an impressive auto insurance score, or a car insurance score, is that it can reduce your monthly insurance payments. 

With a high auto insurance score, you can choose from a wider variety of auto policies and get more competitive pricing compared to when you have a lower score. 

Disadvantages of an auto insurance score

The disadvantage of an auto insurance score is that it reduces your options of auto policies. Even with the available options, you will likely be facing much steeper costs as a result of insurance companies wanting to minimize the risks of insuring you.

What is the difference between an insurance score and a credit score?

The difference between an insurance score and a credit score are the factors used to calculate the metric. A credit score only looks at your history with credit cards and loans, awarding you a score that reflects these factors. 

For credit scoring, the factors include the number of accounts opened, outstanding balances, and regular payment history. Auto insurance scores take your credit score into account as well as  your accident history and claims history. 

Start improving your auto insurance score today!

Improving your auto insurance score comes down to a variety of different factors, but one of the fastest ways to improve your score is by increasing your credit score. Your credit score influences your auto insurance score a great deal, so taking steps to boost it will help. 

One way to kickstart this is by setting up auto-pay to avoid monthly credit payments. Late or missing payments could result in damaged credit and auto insurance scores. Make it effortless by setting up auto-pay using your RoarMoney account®️ and avoid late fees!Your auto insurance score plays a big role in your overall financial health, so improving your car insurance score can make a huge difference! To learn more about how to improve your credit score and how monthly payments can help, check out some of our additional resources available here!

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