Glossary
Credit-based insurance score
A score built from parts of your credit report to predict how likely you are to file insurance claims, used in pricing where state law allows.
Also called: insurance credit score, credit score for insurance, CBIS
A credit-based insurance score is a number calculated from information in your credit report and used by insurers to predict the likelihood and cost of future claims, not whether you will repay a loan. Scoring companies such as FICO and LexisNexis build the models, and many insurers use the resulting insurance score alongside driving record, vehicle and location when setting rates.
The models weigh items such as payment history, outstanding debt, length of credit history, recent applications for credit and the mix of credit types. A 2007 Federal Trade Commission study found that the scores predict claims, which is why they can move premiums substantially, though their use remains controversial with consumer advocates.
State law sets limits. California, Hawaii and Massachusetts bar the use of credit information in auto rates, and Michigan has prohibited using credit scores in auto rating since its 2019 no-fault reform. The NAIC notes that in most states insurers cannot use these scores as the sole reason to raise rates or to deny, cancel or nonrenew a policy. If credit information leads to a higher price, the Fair Credit Reporting Act gives you the right to be told and to check your credit report for errors. See rating factors and credit-based insurance scores and car insurance.
Last reviewed October 4, 2026