In most states, having a poor credit score means higher car insurance rates. That’s because insurance companies are more likely to consider you a high-risk driver if you have bad credit — they actually look at something called an insurance score, but your credit score is a big part of that.
It’s still possible to find cheap car insurance rates even with a poor credit score. Our independent agents can help you shop for car insurance and find your best rates.
Does credit score affect car insurance?
Yes, your credit score can affect what you pay for car insurance. Insurance companies check your credit or credit-based insurance score when you apply for coverage.
Companies match your profile to their existing data to try and calculate how likely you'll be to file a claim, and having a low credit can put you in a higher-risk category.
States that don’t use credit score for car insurance
There are some states where your credit score doesn’t affect what you pay for car insurance thanks to laws forbidding companies from checking your credit:
California
Hawaii
Maryland
Massachusetts
Michigan
Oregon
Utah
Who has cheap car insurance for bad credit?
We found that GEICO has the cheapest car insurance for drivers with bad credit. On average, car insurance from GEICO costs you $157 a month or $1,885 a year if you have bad credit — 40% cheaper than the national average of $3,117 a year.
USAA, Nationwide, COUNTRY Financial, and others also have cheap car insurance for drivers with bad credit. You should always compare car insurance quotes before you buy so you can be sure you’re finding your cheapest options.
Average monthly rate | Average yearly rate | |
|---|---|---|
$157 | $1,885 | |
$170 | $2,042 | |
$181 | $2,166 | |
$188 | $2,251 | |
$210 | $2,523 | |
Kemper | $224 | $2,686 |
$241 | $2,887 | |
Farm Bureau | $250 | $3,000 |
$254 | $3,049 | |
$254 | $3,051 |
Why you can trust our picks for the cheapest car insurance with bad credit
We found the cheapest companies for drivers with bad credit by analyzing rates from Quadrant Information Services. These rates were for every ZIP code in the country and were for the following amounts of insurance:
Bodily injury liability: $50,000 per person, $100,000 per accident
Property damage liability: $50,000 per accident
Uninsured/underinsured motorist: $50,000 per person, $100,000 per accident
Comprehensive: $500 deductible
Collision: $500 deductible
Our sample driver was a single 30-year-old driver who drove a 2017 Toyota Camry and had a credit score under 578.
Some carriers may be represented by affiliates or subsidiaries. Rates provided are a sample of costs. Your actual quotes may differ.
Best car insurance companies for drivers with bad credit
The best car insurance companies for drivers with bad credit are USAA (which is only available for drivers affiliated with the military) Erie, and GEICO. These companies have the highest policycentral scores and the cheapest rates.
Rates with poor credit | policycentral score | |
|---|---|---|
USAA | $170 | 5.0 out of 5 |
Erie | $241 | 4.9 out of 5 |
GEICO | $157 | 4.8 out of 5 |
COUNTRY Financial | $188 | 4.7 out of 5 |
Travelers | $210 | 4.7 out of 5 |
Auto-Owners Insurance | $254 | 4.7 out of 5 |
Nationwide | $181 | 4.3 out of 5 |
American Family | $254 | 4.3 out of 5 |
Kemper | $224 | Not rated |
Farm Bureau | $250 | Not rated |
Methodology: Why you can trust our picks for the best car insurance with bad credit
Our policycentral score considers cost, availability, customer experience and satisfaction, coverage options and feedback from our own policycentral agents — who have years of experience working with real car insurance shoppers.
We assigned weights to each category based on its relative importance, then found the weighted average of these values for each company. The raw scores we assigned to each company were converted into a “z-score” and then a “t-score,” which were then standardized on a 5-point scale. Here’s how our ratings categories break down:
Price (35%): We gave each company a score based on its average rate and available discounts.
Financial strength (25%): We gave point values based on each company’s A.M. Best Financial Strength Rating, S&P credit rating, and Moody’s credit rating.
Customer experience (20%): We scored companies based on how they performed on the most recent J.D. Power Auto Claims Satisfaction and Digital Experience surveys. This category also considers a company's complaint index, which is provided by the National Association of Insurance Commissioners.
Coverage options (20%): We scored companies for the number of coverage types offered and the quality of these options. Less common endorsements earned higher scores compared to add-ons that most companies offer.
Cheapest car insurance for bad credit in every state
We found that GEICO has the cheapest car insurance for drivers with bad credit in 22 states, more than any other company. Remember, not every state allows insurance companies to use credit scores to set rates.
State | Cheapest company | Monthly cost |
|---|---|---|
Safeway | $136 | |
USAA | $142 | |
GEICO | $130 | |
USAA | $150 | |
GEICO | $136 | |
GEICO | $105 | |
GEICO | $182 | |
GEICO | $191 | |
GEICO | $267 | |
GEICO | $159 | |
GEICO | $82 | |
Pekin | $109 | |
GEICO | $106 | |
West Bend Mutual | $128 | |
GEICO | $123 | |
GEICO | $173 | |
USAA | $207 | |
USAA | $87 | |
GEICO | $105 | |
GEICO | $146 | |
West Bend Mutual | $137 | |
National General | $146 | |
USAA | $115 | |
GEICO | $146 | |
Nationwide | $131 | |
GEICO | $129 | |
USAA | $105 | |
Selective | $169 | |
GEICO | $123 | |
GEICO | $136 | |
National General | $83 | |
USAA | $118 | |
GEICO | $96 | |
USAA | $146 | |
GEICO | $137 | |
Nationwide | $124 | |
GEICO | $175 | |
USAA | $139 | |
Kemper | $114 | |
USAA | $129 | |
Redpoint | $113 | |
Nationwide | $143 | |
GEICO | $91 | |
Nationwide | $126 | |
USAA | $136 | |
GEICO | $97 | |
American National | $94 |
Cost of car insurance by credit score
Your car insurance rates depend in part on your credit score. We found that the average cost of car insurance with a poor credit score is $260 a month or $3,117 a year.
The better your credit score, the lower your car insurance rates — drivers with a “fair” score paid an average of $173 a month and drivers with “good” credit paid an average of $142 a month.
Credit tier | Average monthly car insurance rate | Average annual car insurance rate |
|---|---|---|
Excellent (800-850) | $117 | $1,400 |
Very good (740-799) | $129 | $1,550 |
Good (670-739) | $142 | $1,703 |
Fair (580-669) | $173 | $2,073 |
Poor (300-579) | $260 | $3,117 |
Credit ranges based on Experian, scoring ranges can vary by carrier
What is no-credit check car insurance?
No-credit check car insurance doesn’t really exist. As long as you live in a state that permits it, almost every car insurance company will use your credit score to set your rates.
Are there car insurance companies that don’t check your credit?
While nearly every car insurance company considers your credit, some don’t put as much importance on credit scores as others. Companies that set your rates based on how well or how much you drive, don’t tend to care as much about your credit score.
One car insurance company where your credit isn’t as important to your rates is Root, a usage-based company that sets rates based mostly on your driving habits and not other factors, pledged to phase out the use of credit scores by 2025.
Does shopping for car insurance hurt your credit?
No, it doesn’t hurt your credit score to shop for car insurance, even if you get quotes from lots of different insurance companies.
When you get car insurance, insurance companies do what’s called a “soft pull” or “soft credit inquiry.” A soft pull is different from a hard pull, which is what credit card companies do when you apply for a card, for example.
A soft inquiry shows up on your credit record but doesn’t affect your score at all.
How to get cheaper insurance if you have bad credit
There are a few ways to get car cheap car insurance (even with bad credit):
Avoid accidents and claims: Car insurance will be even more expensive if you get into an accident and have to make a claim, so drive safely and obey traffic laws.
Compare quotes: Comparing quotes from multiple car insurance companies is the best way to avoid overpaying for coverage and to find companies that have lower rates for drivers with bad credit.
Complete a driving class: Most insurance companies offer insurance discounts if you complete an accredited defensive driving class.
Get the right amount of coverage: Consider lowering your coverage if you drive an old car that doesn’t need full coverage.
Raise your deductible: A higher deductible means lower rates, but it also means you pay more out of pocket in the event of a claim.
Re-shop your policy: As your credit improves and you qualify for cheaper rates, re-shop your car insurance to see if you can get a better rate with another insurance company.
How to improve your credit score
One other way to get cheaper car insurance is by improving your credit score over time. It takes a while for your credit to get better, but even small gains can pay off big.
Think of it like this: the average car insurance premium for a fair credit score is $2,073 a year, more than $1,000 cheaper per year than for poor credit.
You can improve your credit score by:
Making regular on-time payments to your outstanding credit card debt
Paying down other debt and loan balances you have
Avoiding hard credit inquiries, like for new credit cards
Using only a small percentage of your available credit balance
Keeping credit cards open instead of canceling them
Frequently asked questions
Do you need credit to get car insurance?
You don’t need to have credit to get car insurance, but your rates will be more expensive if you don’t have any credit history. Your rates may even be just as expensive as someone with bad or poor credit.
What is a good credit score for insurance?
There’s not one good credit score for insurance, but you’re more likely to have cheaper rates if you have good credit than bad credit. The better your credit score, the more affordable your rates.
Can you be refused or denied insurance because of your credit score?
It’s possible. Insurance companies don’t have to cover you, and if your credit score is too low, you may have a hard time finding coverage.
