• Jul 03, 2025
• By Cervantes

Does Credit Score Affect Auto Insurance Rates in California?

When shopping for auto insurance in California, many drivers wonder whether their credit score influences the premiums they pay. While California has some of the strictest insurance regulations in the U.S., the relationship between credit scores and auto insurance rates is complex.

How Credit Scores Impact Auto Insurance Rates

In most states, insurers use credit-based insurance scores—a variation of traditional credit scores—to assess risk and determine premiums. Studies suggest that individuals with higher credit scores tend to file fewer claims, leading insurers to offer them lower rates.

However, California is an exception. Under Proposition 103, passed in 1988, the state prohibits insurers from using credit scores as a primary factor in setting auto insurance rates. Instead, insurers must prioritize the following factors:

– Accidents, tickets, and DUIs have the biggest impact.

– The more you drive, the higher the risk.

– Less experienced drivers typically pay more.

– Urban areas with higher accident rates may lead to higher premiums.

Can Insurers Still Consider Credit in California?

While California restricts the use of credit scores, some insurers may still consider them in limited circumstances, such as:

– If you lack sufficient driving history, insurers might use credit as a secondary factor.

– High-risk or non-standard insurers may review credit.

However, the impact is minimal compared to other states where credit plays a major role.

How to Get the Best Auto Insurance Rates in California

Since credit scores have little influence, focus on factors you can control:

✅ Maintain a clean driving record – Avoid accidents and traffic violations.
✅ Choose a higher deductible – This can lower your premium.
✅ Bundle policies – Combining auto and home insurance may lead to discounts.
✅ Shop around – Compare quotes from multiple insurers annually.

Conclusion

Unlike most states, California law significantly limits the effect of credit scores on auto insurance rates. While insurers may still consider credit in rare cases, your driving history, location, and mileage play a much larger role. By maintaining safe driving habits and comparing quotes, you can secure the best possible rates—regardless of your credit score.

Would you like recommendations for California-based insurers with competitive rates? Let me know how I can assist further!