Getting car insurance with bad credit can feel overwhelming, but you’re not alone, and coverage is often still available. While your credit may affect your premium in many states, it’s only one of several factors insurers use to determine your rate. By comparing quotes and using discounts, many drivers with poor credit can still find affordable coverage.
Key Takeaways:
- Even if you have bad credit, car insurance is still widely available.
- Credit may affect your premium, but it’s only one of many rating factors.
- Comparing quotes and using discounts can help you potentially lower your costs.
- Improving your credit and maintaining continuous coverage can help to reduce rates over time.
Does credit really affect car insurance?
In many states, insurance companies use your credit-based insurance score to help determine your premium. This score is different from a traditional credit score but is based on similar factors such as:
- Payment history (on time vs. late payments)
- Outstanding debt
- Length of credit history
- Types of credit
- Recent credit activity
Insurers use this information to help predict risk because statistically, drivers with lower credit scores may be more likely to file claims, which can lead to higher premiums. However, it’s important to note that some states restrict or even prohibit the use of credit in insurance pricing, so it’s essential to understand your state’s insurance regulations.
States where credit may not be used for insurance
Depending on where you live, your credit may have limited impact on your insurance rates.
These are the current states that have restrictions on using credit in insurance pricing:
If you live in a state that allows it, credit may play a bigger role, but it’s still just one of several rating factors. Be sure to review your state’s requirements.
Can you get car insurance without a credit check?
In states where credit is allowed to be used, most insurance companies still use a credit-based insurance score rather than a traditional credit score as part of their pricing model. However, you can still get coverage regardless of your credit history. If you’re concerned about your credit, comparing multiple car insurance quotes may help you find insurers that weigh credit differently.
It’s also important to note that most insurance companies check credit using a “soft” inquiry. This means that getting multiple car insurance quotes will not negatively impact your credit score.
What else affects your car insurance rate?
Other key factors that determine your rate may include:
- Driving record: including accidents, tickets, and DUIs
- Age and experience: Younger drivers often pay more due to less driving experience
- Location: Urban areas may have higher rates
- Vehicle type: Some cars are more expensive to repair or replace than others
- Insurance history: Lapses in coverage can also increase rates
Why do car insurance companies use credit scores?
It might seem like it would be unrelated, but insurers use credit-based insurance scores as one way to help estimate risk. There may be a correlation of certain financial behaviors, such as consistently paying bills on time, with a lower likelihood of filing claims.
However, it’s important to keep in mind:
- Credit is only one factor used to determine your car insurance rate
- Not all states allow insurers to use credit
- Other factors, like your driving record, may have a greater impact on your premium
Tips to getting affordable car insurance with bad credit
Even if your credit isn’t where you want it to be, there are several ways to reduce insurance costs.
1. Compare multiple insurance quotes
Rates can vary widely between providers, so shopping around is one of the most effective ways to save. Different insurers may weigh rating factors differently, which can affect your rate.
2. Choose coverage that fits your budget
Adjusting your policy can make a big difference:
- Raise your deductible to lower your premium
- Evaluate what coverage is necessary for your needs
- Customize add-ons based on your habits
3. Take advantage of discounts
Many insurers offer discounts that can help offset higher rates. Be on the lookout for:
- Safe driver discounts
- Multi-car policies
- Defensive driving courses
4. Avoid coverage lapses
A lapse in coverage can increase your rates, even more than bad credit in some cases. Maintaining continuous coverage shows insurers you’re a reliable policyholder.
5. Work on improving your credit over time
While improving your credit won’t lower your rate overnight, it may help bring it down in the long run.
Start with:
- Paying bills on time
- Reducing outstanding balances
- Monitoring your credit report
Why drivers with low credit choose The General®
Finding the right insurer can make all the difference, especially if you have bad credit.
The General has built its reputation by helping drivers who may need flexible coverage options.
What sets The General apart?
- Over 60 years of experience helping drivers get insured
- 4.7 out of 5 stars from 120,000+ customer reviews on Trustpilot
- Fast, easy online quotes
- Coverage options for drivers with bad credit, driving violations, or lapses in insurance
- AM Best Financial Strength Rating: The General® brand products are underwritten by a member of the Sentry Insurance Group. Sentry has an AM Best Financial Strength Rating (FSR) of A+ (superior), current as of June 2025. See ambest.com/ratings/guide.pdf for rating information.
Whether your credit has taken a hit or you just need a more flexible option, The General works to help you find coverage that fits your situation. Get a free quote from The General to see your options.
Frequently asked questions
Does bad credit make car insurance more expensive?
In many states, bad credit can lead to higher premiums; however, the impact varies by insurer and is only one factor in determining your rate.
Can I be denied car insurance because of my credit score?
No – insurance companies generally don’t deny coverage solely based on your credit score.
What is an insurance score?
An insurance score is a score based on your credit history that insurers may use to help predict risk and determine premiums.
What’s the cheapest car insurance for bad credit?
The cheapest car insurance for bad credit depends on factors like your driving history, location, and coverage needs. Because each insurer weighs credit differently, comparing quotes from multiple companies is one of the best ways to find affordable coverage.
