Auto insurance companies routinely perform credit score checks as part of assessing your policy application. In fact, reporting bureau TransUnion notes on its website that insurers, creditors and landlords are among the few entities that can legally run your report per the Fair Credit Reporting Act. Typically, the insurer conducts a hard credit inquiry, which does briefly affect your score.

Why Insurers Check

Auto insurance decisions and premium calculations are a numbers game. Providers essentially plugged in all of your data and the computer model spits out your overall risks and appropriate premiums for your policy. The Esurance website notes that insurers particularly look at the length of your credit history, your on-time payments and overall standing as a reputable borrower. The company notes that research confirms that those with good credit are often safe, more responsible drivers as well.

The Hard Inquiry

Credit checks involve one of two inquiry types -- soft and hard. A soft inquiry is most common when you check your own credit report. Such a move has no impact on your rating. A hard inquiry typically results when a lender assess your credit-worthiness. Auto insurers routinely perform them as well to fully analyze your credit as part of its risk assessment. A hard inquiry normally lowers your credit rating by a few points, though this effect normally wears off after about six months.

Balancing Inquiries

Multiple hard credit pulls in a brief period of time can have a larger, more enduring score impact. Thus, you might consider avoiding credit card or loan applications right at the time you buy and insure a car. When a lender performs the check, you normally have the chance to better your credit score over time with responsible loan or card use. Since auto insurance isn't a credit relationship, you don't have the same opportunity. You could potentially take another hit if you don't make your premium payments on time and the insurer or a collections company reports you.

Rights to Review

If you do apply for car insurance, you should ask your agent or insurer to provide you a copy of the report used in assessing your insurance application. Similarly, you can get a copy of your credit report for free per the Fair Credit Reporting Act. Ensuring your report is accurate and up-to-date helps you avoid negative consequences in the form of high loan interest rates and higher auto premiums. If you see discrepancies, you should discuss them with your auto insurance agent.