In Canada, whether an auto insurance company can check your credit depends on your province. Ontario Regulation 664 prohibits auto insurers from:
- using credit information in auto insurance quotes, applications or renewals; or
- asking you to agree to the collection or use of your credit information before receiving a quote or renewal.
For this article, our team reviewed the Financial Consumer Agency of Canada’s guidance on how insurers may use credit information and car insurance, Ontario Regulation 664, and FSRA’s guidance on declined or terminated coverage.
If you live in Ontario, improving your credit score won’t affect what an auto insurer charges. Auto insurers cannot use your credit history or credit rating when writing an Ontario auto insurance policy.
Instead, your rate is based on factors such as your driving record, vehicle, location, use, coverage and deductibles.
Read More: See Why Car Insurance Rates Can Rise Without an Accident
What Insurers Can and Cannot Do With Your Credit Information
Outside Ontario, the rules vary by province, type of coverage and insurer.
Where allowed, an insurer may use credit-based information as one factor in pricing or eligibility.
Ask the insurer or representative:
- Am I required to consent to a credit check?
- What happens if I decline?
- Which credit bureau and information will be used?
Ask for the answers in writing before providing consent.
How Your Credit Score May Affect Car Insurance
Where allowed, insurers can use your credit history or a credit-based insurance score when determining your price or eligibility for a particular policy.
A credit-based insurance score uses information from a credit report to assign a number that statistically predicts risk.
Make sure the information in your credit file is accurate. If it isn’t, you can get a free copy of your credit report and follow the credit bureau’s process to correct it.
Other Factors That Affect Ontario Car Insurance Rates
Ontario auto insurers may consider factors including:
- the year, make, model and characteristics of your vehicle;
- your age, sex, marital status and driving experience;
- convictions, accidents, licence suspensions and claims;
- annual kilometres;
- whether the vehicle is used for business; and
- the other licensed drivers on the policy.
Building credit is a separate financial task. It does not change Ontario’s prohibition on using credit information for auto quotes, applications or renewals.
Read More: Learn More About What Impacts Your Car Insurance in Ontario