Does your credit score affect your car insurance? The 2026 state bills trying to change that

If you've ever wondered whether paying down a credit card could move your insurance quote, you weren't imagining it. Most states let insurers factor your credit history — packaged into a credit-based insurance score — into what you pay for auto and sometimes home coverage. In 2026, that practice is under a fresh round of legislative pushback: lawmakers in Iowa, New York, Oklahoma, and Pennsylvania have active bills that would ban or sharply restrict it. None have passed yet. Here's what each bill actually does, and where the practice is already off the table.

What a credit-based insurance score is

A credit-based insurance score isn't your regular credit score — it's a separate score, built from similar credit-report data (payment history, debt levels, length of credit history, new credit, credit mix), that insurers use specifically to estimate insurance-claim risk rather than default risk. Where insurers use it, it's one rating factor among many, alongside your driving record, your vehicle, and — where allowed — your ZIP code. Whether it's used at all, and how heavily it's weighted, comes down entirely to state law.

The four 2026 bills

Oklahoma — SB 1435. Filed January 12, 2026 by Senate Minority Leader Julia Kirt (D-Oklahoma City) as part of a three-bill package aimed at insurance affordability, SB 1435 would remove credit history and credit-based insurance scores as a permissible rating factor for personal auto and homeowners policies. Oklahoma Voice reported the Senate Business and Insurance Committee advanced the bill in early February 2026 — its first procedural hurdle, with a full floor vote still ahead.

Iowa — HF 2259. Iowa already regulates credit-information use in personal-lines insurance under Iowa Code 515.103, which limits things like treating a lack of credit history as a negative factor. HF 2259 goes further, proposing to bar insurers from using credit information at all to underwrite or rate motor vehicle financial liability coverage — auto insurance specifically. Per the Iowa Legislature's own bill-history record, it was introduced and referred to the House Commerce Committee on February 3, 2026, where it remains.

Pennsylvania — HB 657. Sponsored by Rep. Kristine Howard (D-167), HB 657 would prohibit Pennsylvania insurers from using an insured's credit history in rating or coverage decisions — a broader scope than Iowa's auto-only bill. It's a repeat effort: the same proposal was previously introduced as HB 2211. It was referred to the House Insurance Committee in February 2025 and remains there.

New York — A.10524-A. The most sweeping of the four. Introduced March 6, 2026 by Assembly Member Lunsford with several co-sponsors, "Motor Vehicle Insurance Fairness" would bar insurers from using credit scores, income, education, employment, prior insurance history, and most zip-code-level geographic rating in auto pricing, and would require insurers to show their pricing doesn't produce a discriminatory impact on protected groups. It was amended and recommitted to the Assembly Insurance Committee on March 19, 2026.

Where credit-based scoring is already restricted

None of the 2026 bills have to pass for you to already be protected, depending on where you live — several states got there years ago. California has barred it in auto rating since 1988's Proposition 103, which limits rating to driving record, annual mileage, and years of driving experience. Massachusetts and Hawaii don't allow insurers to use credit history or a credit-based score in auto rating at all, and Massachusetts extends that bar to homeowners insurance too. Michigan, Maryland, Oregon, and Utah each impose partial restrictions rather than a full ban — for example, barring insurers from using credit as the sole reason to raise a rate or deny a renewal, without eliminating credit as a factor entirely. If you're not sure how your own state handles it, your state's insurance regulator is the authority, not a national rule of thumb — rating rules genuinely vary state by state, the same point that governs ZIP-code rating.

Why this keeps coming up — and why it usually stalls

Similar bills have surfaced in state legislatures for more than a decade, and most haven't made it past committee. The insurance industry lobbies against them, arguing credit-based scores are a statistically meaningful predictor of claims risk — a position that carries real weight with lawmakers who aren't opposed to risk-based pricing on principle. That history is worth knowing before assuming any of these four bills is close to becoming law: as of this writing, none has reached a floor vote in either chamber, and each is still working through its committee process — Oklahoma's furthest along, having cleared its first Senate committee.

What this means for you right now

• Nothing has changed yet. If you live in Iowa, New York, Oklahoma, or Pennsylvania, insurers can still use credit-based scores in rating today — these bills are proposals, not law.
• Where you live already determines your protection. If you're in California, Massachusetts, or Hawaii, credit-based scoring already isn't part of your auto rate. Elsewhere, it likely is, to varying degrees.
• You can ask. A licensed agent or your current carrier can tell you whether — and how heavily — credit-based scoring factors into your specific rate; that's a fair question to bring to a renewal conversation.
• It's one factor among several you can influence. Your driving record, mileage, coverage limits, and deductibles all move your price too, and unlike your credit history, some of those are adjustable on the spot. See what shapes your auto premium beyond geography for the fuller list.

What to do about it today

Whichever way these bills go, the practical move is the same one that applies to any rating factor you can't control: compare rather than assume. Insurers weight credit-based scores differently where they're allowed to use them at all, which means the same driver can see a meaningfully different price from company to company for identical coverage. Hold the coverage constant — same liability limits, same deductibles — and let the price be the only variable that changes. Start with the auto coverage basics, then compare your options against ClearValue's published comparison standard.

ClearValue Insure doesn't sell, bind, or issue any insurance policy — we're an educational publisher and comparison resource, not a licensed agent, broker, or carrier. For an explanation of how your own state's rules or your own policy's rating factors work, talk to your state's department of insurance or a licensed agent directly.