Texas is shaking up how insurers use credit scoring in personal lines by letting policyholders demand updated rates if their credit scores improve.
Under the newly passed Senate Bill 1644, insurers who use credit scores for underwriting must pull reports no older than 90 days at policy issuance or renewal, update credit checks every 36 months, and adjust premiums accordingly.
If a customer or their agent requests it at renewal, once every 12 months, the insurer must re‑underwrite and re‑rate the policy using a current credit report. Insurers must also send written notice whenever they rate based on credit data or adjust premiums following an updated score.
If an adverse action, such as higher premiums, is taken based on credit report info, the insurer must notify the consumer within 30 days. The notice must identify the consumer reporting agency and explain rights to obtain a free credit report, dispute inaccuracies, and request a policy re‑underwrite/re‑rate.
The law takes effect September 1 and applies to policies issued or renewed on or after January 1, 2026.
There are specific carve‑outs: insurers don’t have to update credit scores or re‑rate policies if the insured is already in the most favorable pricing tier, if credit scoring isn’t used at all, or if the product type doesn’t depend on credit scoring.
The Legislative Budget Board noted the law will not materially impact government budgets; implementation can be handled within existing resources.
Consumer advocates say the law corrects an imbalance, ensuring policyholders benefit from improved credit, not just suffer from declines. Insurers caution the mandate could increase operational complexity and costs.
