Credit scores and insurance.

• Author: Teigen, Anne
• Position: Trends

Most drivers know that a couple of traffic accidents or a long commute will cause their auto insurance rates to go up. But not as many know that a bad credit report can cost them, too.

All states, except New Hampshire, require drivers to buy a minimum amount of auto insurance. State law allows insurance companies to use a variety of information to determine the price of that coverage, including the driver's age and gender, the type of vehicle being insured and how much it's driven, the level of vandalism and number of car thefts in the driver's neighborhood, and even the climate and weather trends where the driver lives.

In all but three states, insurers also use credit scores in determining how much drivers should pay. They cite numerous studies showing that credit scores are a statistically valid tool that can help predict the likelihood of a person filing a claim and the likely cost of that claim.

California, Hawaii and Massachusetts ban the practice. And in 2015, lawmakers in Michigan, Minnesota, Missouri, Montana, Ohio, Virginia and West Virginia introduced bills to do so as well. Proponents of these bills argue that using factors like credit scores...