Does Your Credit Rating Affect Your Insurance Rates? (2025 Guide)

Many clients ask us the same question: “Will my credit score change my insurance rates?”
The short answer: Yes, in most states, including Texas, your credit-based insurance score can affect the price you pay for auto and home insurance.

But there’s a lot of confusion around how insurers use credit, so let’s break it down in a clear and simple way.

⭐ Why Insurance Companies Look at Credit

If you’re comparing Texas auto insurance quotes, understanding how credit affects pricing can help you avoid surprises.

Insurance companies don’t use your credit score the way a mortgage lender does. Instead, they use a “credit-based insurance score”, which predicts how likely a customer is to file a claim.

Studies have shown that people with higher credit scores tend to file fewer or smaller claims, so insurers generally offer them lower premiums.

This practice has been around for decades and even though many consumers dislike it, it’s still allowed in most states.

🔍 Does Checking My Credit Hurt My Score?

No, it does NOT hurt your credit score.
Insurance companies perform a soft inquiry, not a hard pull. If you want a deeper explanation of how credit interacts with insurance pricing, Experian has a helpful guide on how credit scores affect car insurance.

What does this mean for you?

• ✔ No impact on your credit score

• ✔ No negative points added

• ✔ You won’t see a “hard inquiry” on your report

🕒 When Insurance Companies Check Your Credit

Insurers typically only check your credit at two moments:

1️⃣ When you get a quote or start a new policy

This initial credit score is what your rate is based on.

2️⃣ When you request a “re-score”

Some companies allow you to ask for a re-evaluation if your credit improves significantly.

For homeowners insurance, credit can impact your dwelling coverage price, eligibility, and overall Texas homeowners insurance rates.

Important:

Most insurers do NOT monitor your credit monthly or yearly.
So if your credit goes up or down after your policy starts, your insurance price will not change automatically.

📈 If Your Credit Improves, Will Your Insurance Go Down?

Possibly but only if the insurer allows a re-score.

A re-score is when your insurance company rechecks your credit to see if you qualify for a lower rate.

When should you request a re-score?

• Your credit score improved by 50+ points

• You paid off major debts

• Collections or late payments were removed

• You went from “poor/fair” credit to “good/excellent”

Many insurers only allow re-scoring once every 12-36 months, so use this option wisely.

💡 If Your Credit Drops, Will Your Insurance Go Up?

Most insurers do not raise your rate mid-term due to worsened credit.

Your rate typically stays the same until:

• You make a major policy change (add/remove a car, driver, property)

• You shop for a new quote

• The policy renews and the company decides to re-underwrite

🛡 Why Credit Matters More in Homeowners Insurance

For homeowners insurance, credit can impact:

• Your Dwelling Coverage price

• Eligibility with preferred carriers

• Whether you qualify for better deductibles

In Texas, especially, homeowners with lower credit often see much higher rates because of the state’s severe weather and large claim volume. This is especially true for landlords or investors who insure multiple homes and need reliable insurance for rental properties.

If you’re shopping for home insurance, increasing your credit score can make a noticeable difference.

📞 Need a Quote or Want Us to Check Your Rate?

At Aqua Tree Insurance, we can compare your rate with multiple carriers and help you see whether a re-score can save you money.

If you also own a business, you can explore business insurance near me to understand what coverage your company may need.

Call or text: 832-699-6838
Get a quote online: AquatreeInsurance.com

🔚 Conclusion

Your credit doesn’t affect your insurance the same way it affects loans — but it does play a major role in determining your auto and home insurance premiums.

• A soft inquiry means no effect on your credit score

• Your rate won’t change automatically when your credit changes

• A re-score may help you save if your credit has improved

Understanding this helps you shop smarter and save more.