Your credit score impact the rate you'll pay on a credit card, car finance, mortgage or other financial borrowing. However, many people are surprised to learn that your credit score can also affect your ability to buy personal or business insurance. Here's how, and why improving your credit score is so important.

Do insurers check credit scores?

Yes, insurers check the credit rating of any person or business requesting an insurance policy through them. This is usually a ‘soft’ check, meaning it won’t damage your credit rating. Often this process is automated in the background of the insurer’s quote software, but sometimes insurer employees will carry out checks using third party tools as part of the quoting process.

Do brokers check credit scores?

Yes, brokers check the credit ratings of any person or business requesting a quotation through them. Again, this is usually a ‘soft’ check which won’t impact the applicant’s credit rating, but as brokers then approach several insurers for quotes there is a chance that multiple credit checks will be carried out for brokered quotations, although these should all be ‘soft’ checks as well.

Why is my credit score important to insurers?

Insurers use credit scores as a character reference when deciding whether to quote, and what premiums to charge. A credit record not only demonstrates a person’s ability to repay extended credit (for example, monthly insurance instalments), it also shows whether a person can be trusted to repay their debts. Insurers may even decide not to quote a person or business with bad credit, or to increase premiums, or even to require payment up front rather than offering a payment plan.

Can insurers penalise me for having a bad credit rating?

Yes; insurers are under no obligation to provide payment plans, and credit history is considered ‘material’ to certain policy premium calculations. For example, you could argue that a person with an extremely poor credit history is more likely to suffer from financial issues in future, making them a riskier prospect for policies such as Professional indemnity or Directors and officers insurance.

Does poor credit impact my other policy premiums?

It depends on the policy but most insurers will check credit before offering terms. Individual underwriters may decide that they have a higher or lower tolerance for poor credit scores, but ultimately each insurance company and product underwriter has the ability to change insurance premium or acceptance criteria based on credit score. As a rule of thumb the better your credit score the better your chances of getting competitive insurance quotes.

What if I have poor credit?

If you have poor credit you may not be offered a premium instalment plan, your quoted insurance premiums may be higher or you may be declined outright for a quotation. In some cases it may be possible to explain the circumstances behind a poor credit rating directly to an insurer and request that they reconsider. There is no guarantee this will be successful, but it is generally worth asking.

Does my credit score matter if I run a Limited company?

Yes, insurers will check your personal and business credit scores, in addition to reviewing Companies House records for any businesses you have owned or directed in the past. Previous bankruptcies, insolvencies, CCJs or generally poor credit scores for you, fellow directors or any previous company will usually require you to explain the how and why of each occurrence to insurers before receiving a quotation.

Lenders and insurers are currently under increased scrutiny due to rising consumer debt levels. According to NimbleFins analysis of Bank of England and ONS data, average UK household debt (excluding mortgages) reached approximately £18,392 heading into 2026. Consequently, providers may use increased scrutiny of personal debt-to-income ratios and credit utilisation by lenders and insurers.

What is credit insurance?

Credit insurance is available as a risk management option for any business extending credit to third parties, as a means to make sure debts are paid if those third parties are unable to pay. Limited companies can sometimes fail through their customers going out of business, leaving debts behind. According to The Insolvency Service, there were 22,455 business insolvencies in England and Wales in 2025. In this volatile environment, credit insurance has become a valuable safeguard against the ripple effect of a major customer's insolvency. Credit insurance can help to maintain a good credit score for businesses by ensuring that bad debts are paid.

Does paying monthly for an insurance policy help me improve my credit score?

Paying for an insurance policy in monthly instalments through an insurer or broker is unlikely to improve your credit score on its own, as insurers do not typically report payment behaviour to credit reference agencies in the same way that lenders do.

However, there is one indirect route worth being aware of. If you pay those monthly instalments using a personal credit card and clear the full card balance each month, this pattern of borrowing and repaying on time may contribute positively to your credit history over time. Whether this has any effect, and by how much, will depend on your individual circumstances and existing credit profile.

Bear in mind that using a credit card in this way adds a layer of credit on top of the instalment plan itself. If the balance is not cleared each month, or if it increases your overall credit utilisation significantly, it could have the opposite effect on your score. This approach is only likely to be beneficial if you are confident you can consistently clear the balance in full each month.

Always make sure you can afford repayments.