Insurance Scoring in Arkansas: How Credit-Based Scores Actually Work
Your agent says the rate is credit-based, but an insurance score is not your credit score and it is not a general composite either. What Arkansas lets carriers use, what it bans, and why shopping cannot cost you anything.
Short Answer
A number built only from credit-report data to predict claim likelihood — not your lending score, and not a blend of your claims and driving history. Arkansas bans income, ZIP code, gender and marital status from it under Ark. Code § 23-67-405, and shopping for insurance cannot lower it. It is one input among many.
When a carrier says your rate is credit-based, it is easy to hear that as they pulled my credit score and charged me for it. That is not quite what happens, and the difference decides what you can do about it.
What the Term Actually Means
It is built from credit information, and only from credit information
An insurance score is a number or rating derived from an algorithm or model that is based in whole or in part on credit information, used to predict future insurance loss exposure. It is not your lending score — the two draw on the same credit file and weigh it differently for different purposes, so a person can hold an excellent lending score and a mediocre insurance score. It is also not a general composite of everything a carrier knows about you. Claims history, driving record, the vehicle and the property are all rated on, and all of them sit beside the score rather than inside it. That distinction matters because everything restrictive in the Arkansas Act attaches to the score and to credit information specifically.
What Arkansas Bans From the Score
| Can be drawn from your credit report | Banned from the score by Arkansas law |
|---|---|
| Payment history — on-time payments, late payments, collections, charge-offs | Income |
| Outstanding debt and how much available credit is in use | Gender |
| Length of credit history | Address and ZIP code |
| Pursuit of new credit — recently opened accounts | Ethnic group, religion, nationality |
| The mix of credit types managed | Marital status |
Note what is absent from the left-hand column: income and debt-to-income are not part of an insurance score. Insurers generally do not hold your income, and the statute expressly forbids building the score from it. The ratio of debt to income is a lending concept that matters to a mortgage underwriter rather than to this.
Shopping Cannot Cost You Anything
Insurance inquiries cannot be counted against you
Many people believe quoting works like loan shopping, where each application leaves a mark. Under § 23-67-405 a carrier may not use as a negative factor: inquiries you did not initiate, and inquiries you make to check your own credit; inquiries identified on the report as relating to insurance coverage; and multiple auto-loan or home-mortgage inquiries coded within thirty days of each other, which must be counted as a single inquiry. So comparing carriers is free of score risk. The idea that applying for things constantly hurts you is true of new credit accounts — opening several cards or loans changes the pursuit-of-new-credit data the score reads. Getting three quotes from three agencies does not. Those are different behaviors that get lumped together.
But how often you have switched is a different signal
Getting quotes is protected. How many carriers you have actually held, and how often you have moved between them, is a separate insurance-stability input that some carriers weigh when placing a policy. Continuous coverage generally helps and a lapse generally does not, and neither touches the credit-based score. Worth separating, because the protection covers the shopping rather than the switching.
What People Confuse With the Score
The score is one ingredient in the premium rather than the whole meal, and several things that plainly move a rate have nothing to do with it.
| Factor | Part of the credit-based score? |
|---|---|
| Claims history, tracked through your loss-history report | No — separate |
| Location and rating territory | No — ZIP code is banned from the score |
| How many carriers you have held recently | No — separate stability factor |
| The liability limits you previously carried | No — separate |
| Continuity of prior coverage, and any lapse | No — separate |
| The vehicle’s own history, by VIN | No — separate |
| The drivers in your household | No — each person has their own score |
| Vehicle details, mileage and deductibles | No — separate |
| The credit-based insurance score | This is the score |
How it comes together: the rating tier
No single factor sets the price on its own. The carrier weighs all of them together and places the policy into a rating tier, and the tier is what maps to the premium. Labels differ — some carriers use names, some use numbers — but the idea is constant. It is why two neighbors with the same vehicle and the same credit can pay very differently: one carried higher prior limits and an unbroken history, the other moved carriers repeatedly and had a gap. Same score, different tier. It is also why correcting one factor can move you without anything else changing.
Your Protections Under Arkansas Law
- Credit cannot be the only reason. A carrier may not deny, cancel or non-renew a personal insurance policy solely on credit information without considering another applicable underwriting factor independent of credit, and may not base a renewal rate solely on it either.
- No credit card is not an automatic penalty. Adverse action may not be taken solely because a consumer has no credit card account, without consideration of another independent factor.
- Thin or absent credit is treated neutrally. Where there is little or no credit history, the insurer must treat the consumer as having neutral credit or as otherwise approved by the Commissioner.
- Only recent data supports an adverse action. An adverse action based on credit requires a report or score obtained within ninety days before the policy is first written or the renewal issued.
- The information has to be refreshed. The score must be recalculated or an updated report obtained no later than thirty-six months after current information was last obtained, subject to exceptions.
- You can compel a re-rate, in writing. Upon the written request of a consumer the insurer shall reunderwrite and rerate the policy on a current report or score, and need not do so more than once in a twelve-month period. That is a request you make rather than a credit you wait to be offered.
And you have to be told, at the application
Under Ark. Code § 23-67-407, where an insurer writing personal insurance uses credit information in underwriting or rating, the insurer or its agent shall disclose — either on the application or at the time the application is taken — that it may obtain credit information in connection with the application. The disclosure is written, or given in the same medium as the application, and need not be repeated at renewal where it was given before. So this is not something that happens quietly: if it is happening, you were told, and the application is where to look.
If the data is wrong
Where an adverse action rested on inaccurate credit information, the federal Fair Credit Reporting Act provides a dispute route and the carrier can be asked to reconsider on corrected data. Some carriers also operate an exception process where credit was affected by an extraordinary life event; whether yours does is a question to put to them rather than an entitlement Arkansas grants, so ask rather than assume.
Keeping the Score Healthy
- Pay on time. Payment history is the heaviest input in the model.
- Keep balances low against your limits. Utilization is read directly from the report.
- Let accounts age. Closing your oldest account shortens the history the model reads.
- Open new credit only when you need it. A burst of new accounts changes the pursuit-of-new-credit data.
- Check the report for errors and dispute them. A corrected report is the situation the written re-rate request exists for.
- Shop your insurance freely. It costs the score nothing, and it is the fastest way to find out whether the tier you are in is the right one. Which carrier files what is on the page on filed rates.
Where this sits in what you already pay
Across our carrier market full coverage generally runs $79–$105 a month. Cribb cross-market averages for Northwest Arkansas. Planning ranges, not quotes and not any carrier’s filed rates. Where credit scoring moves a particular household inside or outside that is a question about one carrier’s filing rather than a general rule — which is the argument for asking what your own carrier does with it rather than reasoning from an average.
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Frequently Asked Questions
Is my insurance score the same as my credit score?
No. A credit-based insurance score is a separate number derived from credit-report data and built to predict future loss exposure, while a lending score predicts whether a borrower repays. They draw on the same file and weigh it differently, so the two can diverge considerably.
Are my claims and driving record part of my insurance score?
No, though they are certainly rated on. The statutory term describes a score derived from credit information. Claims history, driving record, the vehicle and the property are separate rating factors sitting beside the score, which matters because the restrictions in the Act attach to the score specifically.
Does shopping for insurance or switching carriers hurt my score in Arkansas?
Shopping does not. Ark. Code 23-67-405 prohibits a carrier from using as a negative factor any inquiry you did not initiate, any inquiry you make to check your own credit, or any inquiry identified as relating to insurance coverage, and requires multiple auto-loan or home-mortgage inquiries within thirty days to be counted as one. How often you have actually held different carriers is a separate stability factor that some carriers weigh, but it does not touch the score.
Does my income or ZIP code affect my insurance score?
Not the score itself. Ark. Code 23-67-405 bars an insurer from using a credit score calculated using income, gender, address, ZIP code, ethnic group, religion, marital status or nationality. Your location can still affect the premium through rating territory, which is a factor separate from the score.
Can an Arkansas carrier decline or non-renew me just because of my credit?
No. An insurer may not deny, cancel or non-renew a personal insurance policy solely on the basis of credit information without considering another applicable underwriting factor independent of credit, and may not base a renewal rate solely on credit either. Adverse action may not be taken solely because you have no credit card account.
What if I have little or no credit history?
The insurer must treat you as having neutral credit, or as otherwise approved by the Commissioner. An absent or unscoreable file is not a reason to assume the worst about you.
How current does the information have to be?
An adverse action based on credit requires a report or score obtained within ninety days before the policy is first written or the renewal issued. Separately, the insurer must recalculate the score or obtain an updated report no later than thirty-six months after it last obtained current information, subject to exceptions.
How do I get re-rated after my credit improves?
In writing. Upon the written request of a consumer, an insurer using credit information shall reunderwrite and rerate the policy based on a current credit report or credit score, and is not required to do so more than once in any twelve-month period. That is a request you make rather than something you wait to be offered.
Do I have to be told that my credit is being used?
Yes, at the application. Under Ark. Code 23-67-407 the insurer or its agent must disclose, either on the application or at the time it is taken, that credit information may be obtained. The disclosure is written or given in the same medium as the application, and need not be repeated at a renewal where it was given before.
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Disclaimer: This article is general information and is not insurance, legal, tax or financial advice, and it is not a substitute for the terms of your own agreements or policies. How credit information is used, how heavily it is weighted, and whether it is used at all vary by carrier and by filing. Statutory provisions are summarized in substance rather than reproduced, carry exceptions and conditions not fully set out here, and may be amended. Rating tiers, tier names and the factors weighed within them are set by each carrier. Nothing here is a statement about how any particular carrier scores any particular household, and no page can tell you what your own score is. Coverage is set by the insurance company and is subject to the terms, conditions and exclusions of the policy actually issued to you, which controls in every case. Cribb Insurance Group Inc is an independent insurance agency licensed in Arkansas, Oklahoma, Missouri and Texas. Reviewed 2026-08-10; insurance law and carrier filings change, and this article may not describe the current position after that date. Cribb Insurance Group Inc, 1601 SW Regional Airport Blvd, Bentonville, AR 72713 · (479) 286-1066 · service@cribbinsurance.com.