Does Getting a Car Insurance Quote Affect Your Credit Score?
Last Updated on September 15, 2023
It’s important to shop around for car insurance. But does getting a car insurance quote affect your credit score?
Getting a car insurance quote will not impact your credit score. Although insurers check your credit score to give you a quote, they check it using a “soft pull” instead of a “hard pull.” Soft pulls may appear on your credit report, but they don’t affect your credit score.
Keep reading to find out everything you need to know about how getting a car insurance quote may or may not affect your credit score.
Key Takeaways:
- Requesting a car insurance quote does not affect your credit score because insurers use a “soft pull” rather than a “hard pull” to check your credit.
- Soft pulls are visible on your credit report to you, but they don’t impact your credit score and are not visible to lenders.
- Many car insurance providers and comparison websites offer quotes without requiring a credit check or personal details like your Social Security Number.
- While most insurers use credit-based insurance scores to determine risk and premiums, three states (California, Hawaii, and Massachusetts) have banned the use of credit scores in auto insurance calculations.
Car Insurance Quotes Do Not Affect Credit Scores
No, getting a car insurance quote does not affect your credit score.
Many factors influence your credit score, including the number of times you check your credit score with a hard pull.
However, when shopping for car insurance, car insurance companies do soft pulls – not hard pulls. They check your credit to verify your credit score, but they’re not performing a hard pull like a financing company or credit card agency.
Soft pulls appear on your credit report and are visible to you, but they’re not visible to lenders, nor do they impact your credit score.
Because car insurance quote requests do not impact your credit score, you can request as many quotes as you want without worrying about affecting your credit score.
Many Insurers Offer Quotes With No Credit Check Whatsoever
Many car insurance comparison websites, car insurance companies, and other services let you compare quotes without a credit check.
Typically, you can progress through the first few stages of a quote request without entering your Social Security Number or other credit-related information.
Many car insurance comparison websites simply need your ZIP code and vehicle type, for example, to display pricing information from your area. Even if you haven’t entered your SSN or other personally identifiable information, you may be able to view approximate pricing information from insurers in your area.
If you’re interested in a specific company and want a formal quote, then you may need to input your SSN and complete a credit check. After you enter your SSN and the insurer performs a soft pull, you could get more specific pricing information – but this pull will still not impact your credit score.
Hard Pulls vs. Soft Pulls
Why don’t car insurance quotes affect your credit score? It’s because there’s a difference between soft pulls and hard pulls and how they impact your credit score.
Soft Pulls
Car insurance companies and car insurance comparison websites may perform a soft pull after you input your SSN and other personally identifiable information.
Soft pulls:
- Have no impact on your credit score, regardless of the number of soft pulls in a specific period
- Are also known as involuntary inquiries
- Are used when creditors send pre-approved offers to potential customers
- Are also used when employers check an applicant’s credit history
- Are also used when you check your own credit
- Are visible to you when checking your report but not visible to lenders and others
Hard Pulls
If you specifically authorize someone to check your credit score – say, if you’re applying for a credit card, mortgage, or car loan, then the lender may perform a hard pull.
One or two hard pulls will not significantly impact your credit score. However, repeated hard pulls in a short period could lower your credit score.
Hard pulls:
- Impact your credit score
- Are also known as voluntary inquiries (i.e., you are applying for credit, asking for a credit check, and giving a lender permission to check your credit)
- Are used to approve financing or determine the terms of a loan
- Are visible to other lenders
- Can lower your credit score if there are too many in a short period
Why Insurers Check Your Credit Score
Why do insurers need to check your credit score? Why do insurers care? What happens if I have bad credit or no credit?
The main reason is that credit score is linked to risk. People with low credit scores tend to be riskier to insure than people with high credit scores.
If you have a low credit score, you have a higher risk of missing a payment or letting car insurance lapse, for example. If you have a high credit score, then you tend to be on time with payments and should have no trouble paying car insurance and avoiding a lapse.
Having a low credit score also increases your risk of making a claim. People with low credit scores are significantly more likely to make claims, be involved in accidents, and engage in risky driving behavior than people with high credit scores.
You could be the world’s safest driver, but if you have a low credit score, insurers charge higher premiums because you’re riskier to insure.
Insurers Use Credit-Based Insurance Scores to Analyze Risk
Technically, insurers don’t check your credit score. They check your credit-based insurance score.
A credit-based insurance score is a three-digit number calculated using the information on your credit report.
Although the credit-based insurance score is technically different from your credit score, the two numbers are closely correlated:
- If you have a high credit score, then you should have a high credit-based insurance score, which means you’ll pay lower-than-average premiums. If the average driver pays $200 per month for car insurance, then you might pay $100 per month.
- If you have a low credit score, then you should have a low credit-based insurance score, which means you’ll pay higher-than-average premiums. If the average driver pays $200 per month for car insurance, then you might pay $300 per month.
Credit-based insurance scores are based on similar data to ordinary credit scores. They consider your history of on-time payments, the number of open credit lines, your available credit card limits, your debt, and your foreclosures and bankruptcies, among other factors.
Three States Ban the Use of Credit Scores in Auto Insurance
Insurers in most states are permitted to check your credit score and use this information to calculate premiums.
However, three states have banned insurers from using credit scores to influence insurance premiums. Those three states include:
- California
- Hawaii
- Massachusetts
In most states, having bad credit or no credit will increase rates. In these three states, however, your credit score will not impact rates, and insurers put a heavier emphasis on driving history, ZIP code, and other factors.
Final Word
Getting a car insurance quote will not impact your credit score.
When you request a car insurance quote, the insurer is performing a soft pull. Soft pulls appear on your credit report and are visible to you. However, they’re not visible to lenders and will not impact rates.
In fact, many car insurance companies and car insurance comparison websites allow you to view pricing estimates and receive a quote without inputting your Social Security Number or other personally identifiable information.
Complete a car insurance quote request today to see how much you could save on auto insurance – and stop worrying about how it may impact your credit score.
