Does Your Credit Score Affect Car Insurance?

Depending on where you live, the answer is yes.

You’re finally on the road in your revamped vintage Bronco, but if your credit is poor, you could be leaking money as you go.

Ordinarily, your credit score is used to show lenders that you can be trusted to make your monthly payments. However, depending on which province you live in, your credit score can also affect your monthly car insurance premium.

• Ontario and Newfoundland and Labrador: It’s against the law for auto insurance companies to use your credit score.

• Nova Scotia: While credit checks are allowed, you can’t be denied insurance if you refuse. Recently, in March 2021, the province’s insurance regulator approved a request from RSA Canada to offer discounts to auto policy applicants on the basis of their credit scores.

• Alberta: Insurers have to ask for consent before taking a peek at your credit score, and they’re prohibited from using it if you only want the most basic plan.

• Manitoba, British Columbia, and Saskatchewan: Credit scores are not used by the government-run insurance providers.

• New Brunswick: Credit checks are allowed, as per the province’s Insurance Board, stating that drivers with bad credit pose a higher risk for future claims.

Quebec and Prince Edward Island: While not common, there are no rules forbidding the practice.

No matter where you call home, the best way to save on car insurance is to shop around before you settle on the right policy for your needs and budget. A site like Rates.ca will do all the price comparisons for you and present you with the highest-quality auto insurance at the best rate available to you.