Will My Credit Rating Change My Insurance Rates?

If you've recently checked your insurance renewal and noticed a price increase — and you haven't had any claims or tickets — your credit score may be part of the reason. This surprises a lot of people. Let me explain how it works and what you can do about it.

What Is an Insurance Credit Score?

Insurance companies in most states (including Indiana) are allowed to use a version of your credit history to help determine your premium. This is called an insurance credit score or credit-based insurance score (CBIS).

Your insurance credit score is not the same as your FICO score — it uses similar inputs (payment history, utilization, length of credit history, new accounts), but the calculation and weighting are different for insurance purposes.

Does It Actually Matter?

Yes, significantly. Studies consistently show a correlation between credit history and insurance claims frequency. Insurers have used this data for decades to segment risk. In practice, a person with excellent credit can pay 20–30% less than someone with poor credit for the same coverage on the same home or vehicle.

That's a real number that adds up over time.

Which Types of Insurance Are Affected?

In Indiana, credit can be used for:

Homeowners insurance — yes
Auto insurance — yes
Renters insurance — yes

Life insurance and health insurance do not use credit-based insurance scores.

Can Insurers Use Credit Against You Without Telling You?

No. Under federal law (the Fair Credit Reporting Act), if your credit history results in an adverse action — including a higher insurance premium — you have the right to know which credit bureau was used and request a copy of your report.

What Can You Do About It?

Improve your credit over time. Paying bills on time, reducing credit card balances, and not opening multiple new accounts will gradually improve your score — and your insurance rate at renewal.
Request a re-rating. Many carriers will re-run your credit at renewal. If your score has improved since your policy started, ask your agent to request a re-rate.
Shop your coverage. Different insurers weight credit differently. One carrier might penalize a specific credit profile heavily while another is more lenient. An independent agent like Blue River can compare multiple carriers to find the one most favorable to your situation.
Check for errors on your credit report. One in five Americans has an error on their credit report. A legitimate dispute that removes an incorrect late payment could improve your score — and your rate.

The Bottom Line

Credit is one of many factors that affect your insurance premium. It's not the only one — your claims history, driving record, home characteristics, and location all matter too. But it's one of the more impactful factors that you actually have some control over.

Working with an independent agent who can shop multiple carriers is the best way to make sure you're always in the most competitive position regardless of your credit profile.

Questions about your rates? Contact Blue River Insurance Group — we'll review your current coverage and shop it against multiple carriers.