How Your Credit Score Affects Homeowners Insurance
In most states, insurers use what’s known as a credit-based insurance score to help determine home insurance rates.
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Updated · 2 min read
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Editor & Content Strategist Key takeaways from our analysis
- People with poor credit pay more than 72% more for home insurance than those with good credit, on average.
- Progressive and Allstate offer the most competitive rates for those with lower credit scores.
- If you live in California, Maryland or Massachusetts, your credit won’t affect your rate.
For people with poor credit, buying a house can be challenging — and expensive. Once you find a lender that’s willing to offer you a mortgage, you’ll probably have a higher interest rate than someone with good credit. And you could also pay significantly more for homeowners insurance.
A NerdWallet rate analysis found that a person with good credit would pay $2,490 per year for homeowners insurance, on average. But in most states, someone with poor credit would see an average premium of $4,290 per year — over 72% more.
Get home insurance quotes in minutes
Answer a few questions to see custom quotes and find the right policy for you. Each insurer has its own definitions of “good” and “poor” credit, but they’re generally in line with traditional credit score ranges. A good credit score typically falls between 670 and 739, while below 580 is considered a bad score.
Using credit to set homeowners, renters, condo and mobile home insurance prices is not allowed in California, Maryland and Massachusetts.
How credit affects home insurance rates
Since the 1990s, insurers have used credit-based insurance scores to help measure how risky someone might be to insure. Companies can use these scores to set your rates or decide whether to sell you a policy at all.
A credit-based insurance score is similar to a traditional credit score but weighted differently. Both scores look at factors such as how much debt you have and whether you’ve made payments on time. Here’s how your insurance score breaks down:
- Payment history (40%).
- Current level of debt (30%).
- Length of credit history (15%).
- Pursuit of new credit (10%).
- Types of credit used (5%).
Insurance companies use your score differently than a mortgage lender or credit card issuer. They're not using your credit history to judge your ability to pay your premiums. Instead, they’re trying to predict how likely you are to file a claim. Studies have shown that those with lower credit-based insurance scores file more claims. A greater chance of claims means a greater risk for the insurance company — and a higher rate for you.
Some consumer advocacy organizations have spoken out against the use of credit in setting insurance rates. A 2025 report found that people with poor credit paid more for home insurance than those in areas of high disaster risk. This unfairly penalizes younger people and people of color, said a spokesperson from Consumer Federation of America, one of the organizations behind the report. These populations are often less likely to have strong credit.
Home insurance rates with good vs. poor credit
Below you can see how much a poor credit score will affect your home insurance rates in each state. (We didn’t include states where insurers can’t take credit scores into account when pricing policies.)
Rates reflect the average annual cost of homeowners insurance for a policy with $400,000 in dwelling coverage, $300,000 in liability coverage and a $1,000 deductible.
| State | Good credit | Poor credit | Difference |
|---|---|---|---|
| $4,285 | $7,185 | 68% | |
| $1,385 | $3,305 | 139% | |
| $3,415 | $5,440 | 59% | |
| $4,955 | $9,720 | 96% | |
| $3,910 | $6,775 | 73% | |
| $2,135 | $4,645 | 118% | |
| $1,365 | $3,190 | 134% | |
| $2,845 | $4,120 | 45% | |
| $3,225 | $5,175 | 60% | |
| $900 | $920 | 2% | |
| $2,195 | $3,810 | 74% | |
| $3,240 | $6,715 | 107% | |
| $2,985 | $5,625 | 88% | |
| $3,765 | $6,615 | 76% | |
| $5,455 | $8,695 | 59% | |
| $3,795 | $7,550 | 99% | |
| $2,020 | $5,070 | 151% | |
| $1,525 | $2,845 | 87% | |
| $2,415 | $5,305 | 120% | |
| $3,615 | $6,325 | 75% | |
| $4,445 | $8,465 | 90% | |
| $3,805 | $7,715 | 103% | |
| $3,765 | $7,740 | 106% | |
| $6,015 | $10,860 | 81% | |
| $1,635 | $3,205 | 96% | |
| $1,500 | $2,685 | 79% | |
| $1,480 | $2,700 | 82% | |
| $2,800 | $5,175 | 85% | |
| $1,710 | $2,770 | 62% | |
| $3,025 | $3,965 | 31% | |
| $3,510 | $6,615 | 88% | |
| $2,080 | $4,305 | 107% | |
| $7,255 | $14,465 | 99% | |
| $1,705 | $3,510 | 106% | |
| $1,720 | $3,575 | 108% | |
| $2,230 | $3,970 | 78% | |
| $3,205 | $5,775 | 80% | |
| $3,965 | $7,710 | 94% | |
| $4,220 | $8,170 | 94% | |
| $4,915 | $8,415 | 71% | |
| $1,810 | $3,750 | 107% | |
| $1,170 | $2,170 | 85% | |
| $2,265 | $4,105 | 81% | |
| $1,880 | $2,595 | 38% | |
| $1,645 | $3,255 | 98% | |
| $2,465 | $4,750 | 93% | |
| $2,175 | $4,065 | 87% | |
| $1,805 | $3,765 | 109% |
The cheapest companies for homeowners with poor credit
Each insurer uses its own formula to set rates, so people with poor credit may pay less with some companies than others. Below are a few major insurers’ average annual rates for homeowners with poor credit.
| Company | Average annual rate |
|---|---|
| $3,920 | |
| $4,790 | |
| $4,990 | |
| $5,105 | |
| $5,185 | |
| $6,090 | |
| $7,060 | |
| $7,160 | |
| $7,915 | |
| USAA* | $4,115 |
| *USAA membership is open only to active military, veterans, some federal employees and their families. | |
How to pay less for homeowners insurance
Shop around. The best way to find cheaper insurance is to check rates from multiple companies. You can get home insurance quotes online or ask an independent agent to shop on your behalf. Double-check that each quote has similar coverage amounts and deductibles to ensure a fair comparison.
Improve your credit. In the longer term, improving your credit can save you hundreds of dollars a year on insurance. Paying your bills on time and using less of your available credit can help. So can disputing any errors on your credit report. Learn more about rebuilding your credit.
Ask about discounts. Check with your insurer or agent to make sure you’re getting all the home insurance discounts you’re eligible for. Many carriers offer savings if you bundle multiple policies (such as home and auto). You may also be able to save if you have protective devices such as burglar alarms or smoke detectors.
For more tips, see how to lower your home insurance cost.
Frequently Asked Questions
Does getting homeowners insurance quotes affect your credit score?
When you shop for insurance in most states, an insurance company will do a “soft” inquiry, which doesn’t affect your credit score. That’s different from a hard inquiry, a more thorough review of your credit that can take your score down by a few points. Learn more about credit inquiries.
Does your credit score affect other insurance rates?
In most states, insurance companies use your credit-based insurance score to set rates for auto and renters insurance. A good driver with poor credit will pay a lot more for car insurance than the same driver with a good credit score, according to a NerdWallet analysis.
What credit score do I need to buy a house?
It varies depending on your down payment and the type of loan you get, but could be as low as 500. See the credit score needed to buy a house.
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- 1. Consumer Federation of America. Home Insurers Care More About Consumers’ Credit Score than Disaster Risk, New Research Shows. Accessed Feb 20, 2026.
Methodology
NerdWallet calculated median rates for 40-year-old homeowners from various insurance companies in ZIP codes across all 50 states and Washington, D.C. All rates are rounded to the nearest $5.
Sample homeowners were nonsmokers with good credit living in a single-family, two-story home built in 1984. They had a $1,000 deductible and the following coverage limits:
- $400,000 in dwelling coverage.
- $40,000 in other structures coverage.
- $200,000 in personal property coverage.
- $80,000 in loss of use coverage.
- $300,000 in liability coverage.
- $1,000 in medical payments coverage.
We made minor changes to the sample policy in cases where rates for the above coverage limits or deductibles weren’t available.
We changed the credit tier from “good” to “poor,” as reported to the insurer, to see rates for homeowners with poor credit.
These are sample rates generated through Quadrant Information Services. Your own rates will be different.
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