Yes, it does. In almost all states your credit score can and will affect your insurance rates.
Why does a credit score affect your car insurance premium? It’s because they view you as more of a risk. Research shows that people that have lower credit scores will file more claims than those with better credit.
Applying for insurance, however, will NOT affect your credit score like it would if you applied for a credit card or a car. This is not a hard inquiry on your credit report; therefore, it will not show under hard inquiries, and it will not affect your score.
Each state and company do differ on the discount that they give for better credit scores. However, on average, if you have a low credit score, you could be paying as much as double for the same premium.
According to Value Penguin there are 5 states that do not take your credit score into consideration. Those are: Hawaii, California, Michigan, Washington, and Massachusetts. There are 6 states where your insurance rate can DOUBLE if you have less than perfect credit. Those are: Arizona, Texas, New Hampshire, New Jersey, Minnesota, and New York.
If your credit score increases significantly, it’s best to shop around for new rates. Especially if your current insurance was given from a time when you had bad credit. It’s likely that your rates will go down!
If it is time to start looking for new rates, let us know. We work with some amazing insurance agents and would love to help you save money!