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Insurance scores: how credit affects home insurance
Most states let insurers price home policies with a credit-based insurance score. What it measures, where it is limited and how to dispute it or get a re-rate.
In most states, an insurer may use a credit-based insurance score to decide whether to write your homeowners policy and which price tier to put you in. The score is built from your credit report but is not your lending score: it predicts the likelihood of an insurance claim, not loan repayment. Maryland bars credit from homeowners underwriting and rating altogether, and many other states limit how the score can be used, but where it is allowed it can change which price tier you land in.
What an insurance score is
The NAIC describes a credit-based insurance score as one based partly or entirely on information from your credit history. It adds that traditional credit scores predict loan repayment while insurance scores predict the likelihood of a claim, and that insurers typically weigh the score alongside claims history, property characteristics, location, coverage limits and deductibles (NAIC, page updated March 2026). The Insurance Information Institute says insurers use credit information with other factors to underwrite and price policies, and notes that homeowners and auto are the typical lines (III).
Insurers use scoring vendors, each with its own model, so there is no single "insurance score" you can look up. The NAIC's consumer article gives one example: for FICO's insurance score the five areas are payment history (40%), outstanding debt (30%), length of credit history (15%), pursuit of new credit (10%) and credit mix (5%). The same article says a score cannot use race, color, national origin, religion, gender, marital status, age, or income, occupation or employment history (NAIC Consumer Insight).
Washington's insurance commissioner's office adds two practical points. Formulas differ by insurer, and most weigh recent history more heavily than old history. Bankruptcies, collections, foreclosures and liens generally lower the score (WA OIC).
How it shows up in your premium
The insurer's filed rating plan converts the score into a tier or a rating factor, and that factor multiplies the base premium. A hypothetical, with invented numbers: say the base premium for your home is $2,000 and the plan has a best-tier factor of 0.85, a middle factor of 1.00 and a worst-tier factor of 1.35. Your premium would be $1,700, $2,000 or $2,700, with nothing about the house different. Real tiers and spreads vary by insurer and state, and some states cap the spread; the NAIC's chart notes an Idaho rule that the highest credit-based factor may not exceed twice the lowest.
Credit does not always hurt. The III cites an Arkansas Insurance Department report on 2016 data covering about 3.4 million personal lines policies, in which credit lowered the premium on 56.6% of homeowners policies and raised it on 16.5% (III). That is one state and one year, but it shows why a good score earns real discounts.
Where the debate sits
Insurers and their trade groups argue that the scores predict claims better than other available information, and that using them keeps rates for low-risk customers down. Critics argue that credit history can track income and race indirectly and penalizes people for events such as illness or job loss that have nothing to do with how they maintain a home. Regulators have landed in different places. Washington's commissioner issued a rule banning credit use in personal insurance; a Thurston County Superior Court invalidated it on August 29, 2022, and the agency repealed the rule in February 2023, so credit use there continues with limits. insurance redlining and fair housing law covers the wider fairness questions.
State rules for homeowners insurance
The summary below draws on the NAIC's Summer 2025 chart of credit-use rules, the statutes cited, and the state agencies' own pages. The NAIC chart notes it is not a legal opinion, so check the statute or your department of insurance for your state. home insurance rules by state lists each state's regulator.
| State | Homeowners rule |
|---|---|
| Maryland | Ban. An insurer may not refuse to underwrite, cancel, nonrenew or rate a homeowners risk based in whole or in part on credit history (Md. Ins. § 27-501(e-2)) |
| Washington | Allowed with limits. No cancellation or nonrenewal based in whole or in part on credit; denial only in combination with other underwriting factors (RCW 48.18.545) |
| Oregon | Allowed with limits. No cancellation or nonrenewal of a policy in effect more than 60 days based on credit; one re-rate request a year per insurer and line (ORS 746.661) |
| Michigan | Credit may not be used to deny, cancel or nonrenew (MCL 500.2153); the total rating ban applies to auto, not homeowners |
| Idaho | No higher premium, cancellation or nonrenewal "based primarily" on credit (Idaho Code § 41-1843) |
| Hawaii, Massachusetts | Credit bans verified for auto only; no homeowners ban found |
Nationally, the NAIC says that in most states insurers cannot use these scores as the sole reason to increase rates, many states require notice when credit information played a role in an adverse decision, and some states impose additional restrictions. A state missing from the table is not necessarily unrestricted; check its statute or its department of insurance.
What the insurer must tell you
Federal law treats a premium increase based on a consumer report as adverse action. Under the Fair Credit Reporting Act, an "increase in any charge for" insurance counts (15 U.S.C. § 1681a(k)), and the insurer must then give you notice, the name, address and phone number of the agency that supplied the report, a statement that the agency did not make the decision, and notice of your right to a free copy of the report within 60 days and to dispute its accuracy (15 U.S.C. § 1681m(a)).
Many states add a requirement to explain the reasons. The NCOIL model act on credit information in personal insurance, readopted in November 2025, calls for up to four primary reasons in clear, specific language; "poor credit history" does not qualify (NCOIL model). A model act is a template, not law, so what your state requires may differ. If a renewal letter says credit played a role and gives no reasons, ask for them in writing.
What to do if credit is costing you
- Ask whether credit is used on your policy and what tier you are in. Your agent can usually tell you, even if the score itself is not shown.
- Check your credit reports for errors. The FTC says the bureaus have made weekly free reports at AnnualCreditReport.com permanent. Dispute mistakes with both the bureau and the company that supplied them.
- Ask for a re-rate after a correction. Under the NCOIL model, an insurer that learns a dispute found the credit data incorrect re-underwrites and re-rates within 30 days and refunds any overpayment back to the shorter of 12 months or the policy period. Your state may do the same, or may leave it to the insurer.
- Ask for a re-rate at renewal. The same model lets a consumer or agent request a re-underwrite using a current score at annual renewal, no more than once in 12 months. Insurers also refresh scores on their own schedule, and the model sets 36 months as the longest interval between refreshes, so a better score may not reach your premium until you ask.
- Invoke the life-circumstances exception. The NCOIL model requires reasonable exceptions, on written request, where credit was directly affected by a catastrophic event declared by government, serious illness or injury, death of a spouse, child or parent, divorce, identity theft, an involuntary job loss of at least three months, or military deployment overseas. The insurer must respond within 30 days of sufficient documentation. Alaska, Connecticut, Delaware and Nevada have exception laws, per the NAIC chart.
- Shop. Insurers weight credit differently, and some rating plans lean on it less. An independent agent can tell you which of their carriers do. Use the homeowners quote comparison worksheet and keep coverage identical.
- Keep the fundamentals clean. The NAIC's advice is the standard list: pay on time, catch up quickly when you fall behind, and keep card balances low.
The NCOIL model also bars insurers from counting inquiries you initiated, or insurance-related inquiries identified as such on your report, as a negative factor. In a state that follows it, pulling your own report or getting quotes should not count against you.
Credit is one thread. A recent loss can matter as much as credit (CLUE reports: how claims history follows you and your house), and a coastal location or an old roof can matter more (what affects your homeowners insurance rate). If you cannot tell where a jump came from, your home insurance premium jumped: what to do shows how to isolate it.
Key takeaways
- A credit-based insurance score is built from your credit report but predicts claims, not loan repayment; each insurer uses its own model.
- Maryland bans credit in homeowners rating and underwriting; most other states allow it with limits, such as no cancellation or nonrenewal on credit alone.
- A premium increase based on credit is adverse action under the FCRA, entitling you to notice, the agency's name and a free copy of the report within 60 days.
- Dispute credit report errors, then ask in writing for a re-rate and for a re-score at renewal; the NCOIL model supports both, but your state may differ.
- Ask about life-circumstance exceptions after a job loss, illness, divorce or disaster, and shop carriers that weigh credit less.