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Why credit history matters

As you may know, many insurance companies use credit-based scores to help determine a customer's insurance premium. This FAQ section can help you understand how your score is calculated and how it could impact what you pay for your policy. (Please note that the use of insurance scores varies by state.)

What is an insurance score?

Your score is compiled through a review of your credit history and any patterns that result. It may take into account your payment history, any outstanding debts, the length of your credit history, whether you've filed for bankruptcy, and any new applications for credit. The score is used to help insurance companies accurately assign an appropriate price available for your policy.

How does insurance scoring work?

Extensive research shows a correlation between credit history and insurance claim history – that those with certain patterns in their credit history are more likely to file insurance claims. Insurance scoring works by giving a higher score to those who are less likely to file claims and a lower score to those most likely to file claims.

An insurance score does not take into account income, race, gender, religion, marital status, national origin or geographic location. It only reviews your credit history.

Why do companies use insurance scores?

When insurance companies know the likelihood that a customer will file a claim, they can set rates that are accurate and appropriate for each customer. This enables carriers to offer insurance coverage to a broader range of customers and helps them determine your price.

Although credit history helps predict the potential for future losses, it's only one factor used in determining the cost of your policy. A driver's age and prior claim history are two other important factors.

How does Travelers use my insurance score?

Travelers uses your insurance score together with a number of other factors to determine the appropriate pricing level available to you. Generally speaking, customers who have higher insurance scores and no prior claims or accidents qualify for our better price.

For those customers with prior claims or accidents, a higher insurance score will help them qualify for a better rate than a similar customer who has a significantly lower insurance score. In turn, customers with no prior accidents or claims, but who have low insurance scores, may also qualify for a competitive rate.

What if there is an isolated problem on my credit report?

In most cases, an isolated instance of a late payment will not have a significant impact on your insurance score if you have an established pattern of responsible credit use. Travelers, however, recognizes that sometimes people face difficult circumstances, such as medical issues, divorce, or job loss. We've created an Insurance Score Resource Center (ISRC) to assist our customers and independent agents with issues like this.

The information in my credit history is personal and sensitive. What protection do I have against misuse?

Your privacy is important to us. We take steps to protect information we have about you. These steps include having physical, electronic and procedural safeguards in place. For more information, read our privacy policy.

Will my agent have access to my credit report?

No. Your agent will not have access your credit-based insurance score or your credit report.

How can I improve my insurance score?

One of best things you can do is to make sure you pay your bills on time. You can also review the amount of credit you have and whether you're up to your limit your credit card(s). Consider how to reduce your debt without creating additional credit activity. Also, review your credit report regularly. Additional recommendations on improving your credit score are available from the American Insurance Association (

More information on insurance scores is available from the Insurance Information Institute ( under the "Credit Scoring" link.

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The information on this site is general in nature. Any description of coverage is necessarily simplified. Whether a particular loss is covered depends on the specific facts and the provisions, exclusions and limits of the actual policy. Nothing on this site alters the terms or conditions of any of our policies. You should read the policy for a complete description of coverage. Coverage options, limits, discounts, packages, deductibles, repair options, billing options and other features are subject to availability and to individuals meeting our underwriting criteria. Not all features available in all areas.

Insurance is underwritten by The Travelers Indemnity Company and its property casualty affiliates, One Tower Square, Hartford, CT, 06183. For a complete list of personal insurance underwriting companies, click here.

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