Does Your Credit Score Still Affect Your Car Insurance in 2026? (State-by-State Breakdown)
Four states ban credit-based insurance scoring entirely: California, Hawaii, Massachusetts, and Michigan. Three more — Maryland, Oregon, and Utah — place significant restrictions on how carriers can use credit data. In the remaining 43 states and Washington D.C., your credit profile can affect your premium more than a DUI. MoneyGeek's 2026 analysis found the national average credit-score penalty is $2,102 per year. In 30 states, it exceeds $2,000. Here is the full state-by-state breakdown with 2026 data.
The Four States Where Credit Does Not Matter for Auto Insurance
California, Hawaii, Massachusetts, and Michigan prohibit auto insurers from using credit information in rating, underwriting, or renewal decisions. Each arrived at its ban through a different path.
California's ban stems from Proposition 103, a 1988 voter initiative that restricted rating factors to driving record, miles driven, and years of experience. MoneyGeek's modeling shows that if the ban were lifted, California drivers with poor credit would pay $4,941 per year versus $1,388 for excellent credit — a 256% surcharge of $3,553, the largest modeled gap in the country.
Massachusetts bans credit use for both auto and homeowners insurance, making it the only state with a complete two-line personal insurance credit ban. Hawaii's statute forbids credit consideration only for auto policies — homeowners insurers can still factor in credit.
Michigan approved legislation in 2019 prohibiting credit scores in auto insurance rating, though carriers may still use credit to determine installment payment options.
The Three States With Restrictions
Maryland prohibits carriers from using credit to deny initial applications, cancel policies, refuse renewals, or increase premiums at renewal. They can use credit for initial rate setting on new business.
Oregon does not ban credit scoring outright but prohibits carriers from using credit as the sole basis for canceling or non-renewing a policy.
Utah restricts how credit data can be applied, similar to Oregon's framework, without an outright ban.
2026 Legislative Activity
Six states introduced or advanced legislation in 2026 to restrict or ban credit-based insurance scoring. Illinois passed a chamber. Bills are pending in Iowa, New York, Oklahoma, and Pennsylvania. The NAIC continues to monitor the practice through its Credit-Based Insurance Scores Working Group, and the debate between accurate risk assessment and consumer fairness remains active.
How Much Credit Actually Affects Your Rate
Bankrate's 2026 analysis shows drivers with poor credit pay 105% more for full coverage than those with excellent credit — $4,745 versus $2,318 per year. MoneyGeek found an even wider gap: poor credit drivers pay $5,435 per year versus $1,597 for good credit — a $3,838 difference.
The penalty scales with each tier. Dropping just one credit tier increases premiums by an average of 17%, or roughly $355 per year, according to The Zebra's analysis of 61 million insurance rates.
| Credit Tier | Est. Annual Full Coverage Premium | Increase vs. Excellent |
|---|---|---|
| Excellent (800+) | $1,308 | Baseline |
| Good (700-799) | $1,597 | +$289 (22%) |
| Fair (640-699) | $2,602 | +$1,294 (99%) |
| Poor (580-639) | $3,613 | +$2,305 (176%) |
| Very Poor (under 580) | $4,745 | +$3,437 (263%) |
State-by-State Extremes
The penalty varies dramatically by location. Wyoming has the largest credit-score penalty in the country at $2,876 per year — $240 per month. Drivers with excellent credit in Wyoming pay $1,516; drivers with poor credit pay $4,392.
Texas follows closely at $2,712 per year. A Texas driver with a spotless record and poor credit pays nearly triple what an excellent-credit driver pays for identical coverage. Nevada sees the highest percentage penalty at 199%, where poor-credit drivers pay over $3,100 more.
At the low end, North Carolina's penalty is $530 per year (59%), the smallest in the country among states that allow credit scoring.
Carrier Variability Is Massive
The same driver with poor credit can receive wildly different quotes depending on the carrier. MoneyGeek's 2026 data shows GEICO charges $212 per month for a driver with poor credit. State Farm charges $590 per month for the same driver — a $378 per month difference. USAA has the lowest credit weighting among major carriers. Progressive and Allstate weight credit heavily. GEICO and State Farm fall in the middle.
This means shopping across carriers is the single most effective strategy if your credit is less than excellent. A driver with poor credit who switches from State Farm to GEICO could save over $4,500 per year.
What Improves Your Insurance Score
Credit-based insurance scores are not the same as your FICO score, but they draw from the same data. The 2026 ATTract model update increased the weight of recent payment history while reducing the weight of long-term credit utilization. This means recent improvements in payment behavior show up in your insurance score faster than before.
Payment history carries the most weight. Credit utilization above 50% is a significant drag. Derogatory marks — collections, bankruptcies, tax liens — are the most severe negative factors. Length of credit history and recent hard inquiries have moderate impact.
What You Should Do
Request your LexisNexis consumer disclosure annually. It contains your ATTract insurance score and CLUE claims history, and errors are common. If your credit has improved since your last policy term, re-quote immediately — insurers check credit at each renewal, and improvements apply at the next term.
If you live in California, Hawaii, Massachusetts, or Michigan, credit does not affect your auto rate. Focus on your driving record, annual mileage, and available discounts. In every other state, treating your credit as an insurance pricing factor — and shopping for carriers that weight it least — is one of the highest-ROI actions you can take to lower your premium.