Q

Do car insurance quotes affect credit score?

A

Don’t worry, getting car insurance quotes won’t negatively impact your credit. But there are a few factors to consider as you gather quotes

Anna Swartz 1600

By

Anna Swartz

Anna Swartz

Insurance Expert

Anna Swartz is a Managing Editor at Policygenius, specializing in auto insurance. Her work has appeared in Mic, The Dodo, AOL, MSN, HuffPost, Salon and Heeb.

Published May 31, 2019|2 min read

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Key Takeaways

  • Unlike applying for a loan, getting an auto insurance quote won’t hurt your credit score

  • Getting multiple quotes helps you shop around and find the right policy for you

  • If you’re concerned about your credit score, take steps to bring it up, like paying bills on time

When shopping around for car insurance, it’s best to get multiple quotes so you can compare your offers and choose the best policy for your needs — and your bank account. But does getting an auto quote affect your credit score?

Thankfully the answer is no, getting an auto insurance quote doesn’t negatively impact your credit score. Unlike, say, applying for a car loan, the credit check that car insurance companies run on you doesn’t ding your credit score.

When you apply for a loan, the lender will do a hard inquiry to check your credit, which can knock a few points off your credit score. But car insurance companies do a soft inquiry, which won’t be visible to future lenders and won’t impact your credit score, although it will show up on your personal credit report.

Still, don’t worry about getting multiple quotes from auto insurance companies — it won’t hurt your credit and it will help you find the right insurance policy.

In this article:

What is a credit score?

A credit score is a three-digit number that represents your trustworthiness as a borrower. But you actually have lots of credit scores. There are three main credit bureaus, Equifax, TransUnion, and Experian. They all generate credit reports.

Credit scores are calculated based on credit reports — but there are also multiple scoring models used to generate those scores, like FICO and VantageScore. So instead of one, universal credit score, you actually have many, but they’re likely all within a similar range.

How are credit scores calculated?

Different scoring models use specific algorithms to calculate your credit score, but in general, your credit score combines different factors about your financial history, including your payment history, meaning whether you make your credit card and loan payments on time, your credit utilization, which is the percentage of your available credit that you’re actively using, and the length of your credit history, meaning how long your accounts have been open.

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What impacts your credit score?

As we mentioned above, getting a quote from an insurance company won’t have a negative effect on your credit score. Neither will checking your personal credit report yourself, or inquiries from potential employers. Hard inquiries, like when a lender checks your credit while you apply for a loan, will ding your credit slightly.

Actions that will have a much more serious negative impact on your credit score are paying credit card or loans late, skipping payments altogether, carrying too high a balance or frequently opening new credit cards.

If you’re concerned about your credit score, you can improve your number by making all your current payments on time, carrying a low balance on your credit card and paying off your debt when possible.

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