Best Car Insurance Quotes for Bad Credit
COUNTRY Financial, Auto-Owners, and USAA are the best insurers for drivers with poor credit.
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Credit scores typically range from 500 to 800. Insurers typically consider scores of 669 or lower to be “below average” and a score of 580 or lower as “poor.”1
Most car insurance companies consider your consumer credit information when setting auto insurance rates. Actuarial data shows drivers with poor credit tend to file more claims than drivers with good or excellent credit, so insurers typically charge higher rates to drivers with poor credit.
For example, the overall average cost of car insurance for drivers with poor credit is $174 per month, according to Insurify data. Meanwhile, the monthly average for drivers with excellent credit is $125. Comparing car insurance rates can help drivers with below-average credit find the best deal available to them.
Quick Facts
States that restrict or ban auto insurers from considering your credit history include California, Hawaii, Massachusetts, and Michigan.
Applying for car insurance shouldn’t affect your credit history.
In most states, insurers can deny you coverage if you have bad credit or charge you a much higher rate than a driver with good credit.
Best car insurance for drivers with bad credit
Even if you have bad credit, you have options when it comes to car insurance. Here are some of the best car insurance companies for drivers with lower credit scores.
Disclaimer: Table data sourced from real-time quotes from Insurify's 500+ partner insurance providers and quote estimates from Quadrant Information Services. Actual quotes may vary based on the policy buyer's unique driver profile.
Our editorial team spent more than 350 hours developing the Insurify Quality (IQ) Score and scoring insurance companies. The IQ Score objectively analyzes and calculates a score for insurers using more than 15 crucial criteria. The team weighted criteria by importance to the consumer — factors such as customer reviews and affordability influence the score more than availability and third-party ratings.
We rate each company on a 1 to 10 scale based on five categories: financial ratings, customer satisfaction, affordability, customer support and transparency, and availability. Insurify updates ratings once a year or as more recent information becomes available.
- Third-party financial ratings: Insurify uses data from AM Best, S&P, Moody’s, and more to compare insurance companies’ credit and ability to pay out future claims.
- Customer satisfaction: To calculate this score, Insurify analyzed more than 55,000 customer reviews across 155 car insurance companies. We also consider third-party ratings from J.D. Power, the National Association of Insurance Commissioners, and Trustpilot.
- Affordability: Our data scientists analyzed more than 90 million real-time auto insurance rates from our partners across the U.S., as well as available discounts, to calculate an affordability score.
- Customer support and transparency: This measures coverage options, ease of claims filing, and the insurer's transparency surrounding discounts, coverages, and claims process.
- Availability and reach: Insurify scores availability and reach by identifying the number of states in which insurers offer coverage and company size by market share.
COUNTRY Financial: Best for bundling and discounts
Mile Auto: Best for low-mileage drivers
GEICO: Best for broad availability
Auto-Owners: Best for customer satisfaction
Cheapest car insurance for drivers with bad credit
Finding affordable car insurance when you have bad credit can feel challenging, but shopping around for quotes from multiple insurers can help you find cheap coverage.
Here are the cheapest companies for people with a low credit score.
Why does your credit score affect car insurance rates?
Car insurance companies make pricing decisions based on the level of risk you pose, including your likelihood of having an accident and filing a claim. Studies have shown that people with bad credit tend to file claims more frequently than drivers with good credit.
The two are correlated, although having bad credit doesn’t directly cause people to file more claims. Insurers may use credit history to generate a credit-based insurance score, which they then consider when deciding whether to approve or deny you for a policy. And if you’re approved, companies may also consider your credit score when setting your rates.
Due to concerns over the accuracy and fairness of the practice, four states ban or limit auto insurers from considering your credit score when you apply for car insurance:3
California
Hawaii
Massachusetts
Michigan
How credit-based insurance scores work
Car insurance companies don’t look at your consumer credit scores when setting rates. Instead, they use the information in your credit file to generate a credit-based insurance score. Each company has its own proprietary formula for generating an insurance score, so you can have more than one credit-based insurance score.
But all insurance companies use credit-based insurance scores to help predict how likely a driver is to file a claim and how much those claims might cost the insurer.
While you can easily get a free copy of your credit reports and see your credit scores, you might have a harder time seeing your credit-based insurance scores. You may be able to ask your current insurer or an insurance agent for yours.
Car insurance rates for bad credit by state
Here’s a look at how much you might pay on average each month for car insurance by state if you have bad credit, according to Insurify data.
Alternative options for drivers with bad credit
If you’re having a hard time finding standard coverage at a price you can afford because of your credit score, you can look into a few alternatives. Drivers with bad credit scores may benefit from insurers that don’t require credit checks, telematics driving programs, or non-standard car insurance coverage.
No-credit-check auto insurance
Insurers that don’t look at your credit are relatively rare. An estimated 95% of all car insurance companies use your credit information in states where it’s legal. Depending on where you live, you may not find insurers that don’t check your credit.
If you can find a no-credit-check insurance company, you should earn rates more in line with people who have better credit scores. Make sure to research the company to decide whether it’s good to work with.
Telematics
If you enroll in a telematics program, your insurer will receive information about your driving habits, including how often you drive, whether you safely accelerate and decelerate, and what time of day you typically drive. You usually need to plug a telematics device into your car or download your insurer’s mobile app to your phone and allow it to record your driving habits.4
If you’re a good driver, you can earn significant savings on your car insurance costs. Some companies offer discounts of 30% off or more. On the flip side, you may end up paying more if you don’t practice safe driving habits.
Non-standard car insurance
Some companies specialize in working with high-risk drivers, including people with bad credit or poor driving records. You can look to these insurers if one or more traditional insurance companies have denied issuing you a policy. Insurance from non-standard insurers that provide coverage to high-risk drivers typically costs more.
How to boost your credit score
Good credit can have many advantages, including allowing you to qualify for lower car insurance rates. It’s impossible to go from bad credit to good credit overnight, but you can take steps to improve your standing over time, such as:
Pay your bills on time. Credit card companies, utilities, and other companies typically report consumer payment history to the credit bureaus. Always paying your bills on time is the most important thing you can do to build your credit.
Pay down credit card balances. Your credit utilization ratio — the percentage of credit you’re using compared to your total available credit — is a significant factor in credit scoring. Keeping credit card balances low — or better yet, paid in full — will improve your credit utilization and ultimately your credit score.
Avoid applying for too much credit. It’s a good idea to only apply for credit when you actually need it. To grant you a new credit account, creditors look at your full credit report. This is called a “hard inquiry.” Too many hard inquiries can lower your credit score.
Clean up credit report errors. Credit reports can have mistakes on them that negatively affect your credit score. Get free copies of your reports from the three major credit bureaus (Experian, Equifax, and TransUnion) and check for errors. If you spot any, contact the credit bureau in writing to have it corrected.
How to save on car insurance
You may pay more for coverage if you have bad credit, but you can still find ways to lower the cost of car insurance. Consider the following tips to earn cheaper coverage:5
Drivers with bad credit FAQs
Though drivers with bad credit typically pay higher rates than people with good credit, you can still find affordable coverage. The following information should help you understand how your credit history can affect your car insurance rates.
Does Progressive check credit?
Yes. If you apply for a car insurance policy from Progressive, the insurer will check your credit. Progressive says it analyzes credit report information along with accident and insurance claim histories. The company also says that “favorable credit factors” — like a long record of credit use, multiple accounts in good standing, low use of available credit, and no late payments or past-due accounts — will result in lower premiums.
Does applying for car insurance hurt your credit score?
No, not usually. Most insurers rely on a soft credit pull when you check your rate and apply for car insurance. Soft credit pulls show up on your credit report but won’t affect your credit score.
Can you be denied car insurance due to credit history?
Yes. Car insurance companies can deny issuing you a policy based on a poor credit profile. If that happens, the Fair Credit Reporting Act requires the insurer to send you a letter telling you why you were denied, where it got your credit report, and how to get a free copy of your own so you can double-check it for accuracy.
Can you get car insurance with bad credit?
Yes. You can get car insurance if you have bad credit. But you may face higher premiums than someone with good credit. Insurers may also deny you coverage. Some insurers don’t require credit checks during the application process.
Do insurance companies check your credit score?
Most car insurance companies will check your credit history when you apply for coverage, but they don’t look at your credit score. Instead, they use the information in your credit history to generate a credit-based insurance score. Insurers can use this information to approve or deny your application and decide what price to charge you.
Can you build a credit score with car insurance?
No. Your car insurance payments won’t help you improve your credit, unfortunately. But not paying for your coverage can have a negative effect on your credit history. If your insurer notifies a collection agency of an unpaid bill, the agency may report that overdue payment to the credit bureaus as a debt that you owe. That can seriously affect your credit score.
Do any car insurance companies specialize in providing coverage for drivers with bad credit?
Yes. Some high-risk insurers specialize in providing insurance for people who have trouble finding coverage through traditional insurance companies. But these companies typically charge much higher rates.
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