Can insurance companies check your credit score in Canada?

With files from Tyler Wade

This blog was originally published on September 16, 2021 and was updated on November 28, 2025.

When shopping for insurance, you may be surprised to learn that your credit score can influence what you pay for premiums. While credit scores are essential factors in loans and mortgages, they can also help you secure lower rates on home and auto insurance. However, whether an insurance company checks your credit score depends on your province of residence and whether you provide consent.

Let’s break down how credit scores factor into your home and auto insurance costs across Canada. 

Are insurance companies allowed to check your credit score?

Whether insurance companies are allowed to check your credit score depends on the type of insurance you’re seeking, your province of residence and if you’ve opted into a credit check. Any insurer that uses credit checks as part of its underwriting must comply with the IBC’s Code of Conduct.

Note that you are not required to opt into a credit check if you do not want one, and insurers cannot deny you coverage or cancel your policy.

Home insurance

Most home insurance companies across Canada will ask to perform a soft credit check when you apply for an insurance policy. However, you must provide consent for the credit check to be done.

Typically, insurers ask for your credit score to determine how much risk you’ll bring as a policyholder. The idea is that if you have a high score, you’re more likely to pay premiums on time and pose less of a risk to the insurance company. 

While insurers consider your score when calculating premiums, it is not the only factor that determines your rates. The size and type of property, your insurance coverage needs and claims history are also significant factors that will influence the cost.

Auto insurance

With car insurance, the rules are more complex. Whether or not a car insurance company is allowed to check your credit score depends on where you live. For example, in Ontario and Newfoundland and Labrador, insurers are banned from using credit scores to determine rates. However, in some other provinces, insurers can use your score with your consent. 

Like home insurance, a higher credit score could help you secure a discounted rate. However, other factors, including your driving history, vehicle make and model and location, are significant considerations when determining your auto insurance premium.

What provinces allow car insurance companies to check your credit score?

The problem of using credit scores to determine risk

While credit scores can be an indicator of the risk a policyholder brings, they can also be challenging to standardize. For example, sources (Equifax and TransUnion) can vary based on their credit rating terms. 

 In addition, individuals such as retired seniors or newcomers to Canada may have lower credit scores that are unrelated to driving or home maintenance risk, leaving them to face potentially higher rates. 

 A credit score is not always a true indicator of risk for auto and home insurance. That’s why it’s imperative that insurers follow the IBC’s Code of Conduct.

Does a credit check from an insurance company hurt your credit score?

“No, a credit check from an insurance company will not affect your credit score,” says Morgan Roberts of RH Insurance. “Insurance companies run a soft credit check.” Soft credit checks have no impact on your credit score whatsoever. 

If you’re paying higher rates, Roberts recommends speaking with your broker about quick ways to reduce your premium, like re-examining your coverage, increasing your deductible, bundling with home insurance, and, above all, driving responsibly. 

She adds, “You can find a company that doesn't do soft credit checks. At RH Insurance, we have a few companies that offer great rates without credit checks.”

When I asked how much of a factor your credit score is in your insurance rate, she said, “It’s a pretty big factor. [It] gives a good discount. If you have bad credit or don't provide consent to the credit check, then a lot of companies don't offer monthly payment plans.” 

How to improve your credit score

Your payment history is the most significant factor in determining your credit score. 

So, always make your payments on time (or at least the minimum if you can’t). If you have trouble paying a bill, contact your credit card company immediately. Even if you’re disputing a payment, don’t skip paying it. 

Don’t go over your credit card limit, and use your credit wisely. There is a credit utilization ratio that says you should use less than 35% of your available credit. In other words, if you have a credit limit of $1,000, don’t use more than $350 (or 35% of your limit). 

If you have lines of credit and auto loans, include them all in your utilization ratio. 

The bottom line

Insurance companies can check your credit score, depending on your province and your consent. Opting for a soft credit check can help you lock in lower premiums without affecting your score. However, you are not required to consent to a check and won’t be penalized for opting out. To find affordable home and auto insurance rates, compare insurance quotes online today at Ratehub.ca.

Also read:

• Does checking your credit score lower it?
• 15 ways to get cheap car insurance in Canada
• 15 ways to save money on home insurance