How To Get Car Insurance With A Low Credit Score

Ever wondered why your car insurance quotes always seem higher than expected? Do you keep getting the sense that your credit score is holding you back from better rates? You're not alone—many drivers are surprised to learn that their credit history can have a tangible impact on what they pay for car insurance. But here's the good news: A low credit score doesn't mean you're stuck with sky-high premiums forever.

Is there a way to find affordable car insurance, even if your credit score isn't perfect? Let's break down the facts, bust some myths, and look at practical tips that work, so you can save money and stay protected on the road.

Why Does Credit Score Matter For Car Insurance?

It's a common question: Why do car insurance companies even care about your credit score? Well, insurance providers use a range of factors to set their rates, and credit history is one of them. In most states, companies look at your credit-based insurance score. This is different from your regular credit score, but it's built using similar information, such as payment history, debt levels, and the length of time you've had credit accounts.

Here’s what the data says: Insurers believe that people with higher credit scores are less likely to file claims. That’s why a low credit score can sometimes lead to higher insurance rates.

But don't panic. There are ways to keep your costs in check, regardless of your current credit report.

How Big Of A Difference Can Credit Score Make?

Let’s get specific. Imagine two drivers with identical records—same age, same car, same address. The only difference? One has excellent credit, and the other has fair or poor credit. In many cases, the person with the lower score could pay hundreds of dollars more per year for the same coverage.

For example, a 2024 study by a primary insurance comparison site found that drivers with "poor" credit paid up to 70% more than those with "excellent" credit in some states. That's a significant jump, and it's why finding the right strategy is crucial.

Is It Possible To Get Car Insurance With Bad Credit?

Absolutely! Millions of drivers with low credit scores have car insurance, and many of them find ways to reduce their costs. The key is knowing where to look, what questions to ask, and how to make your situation work in your favour.

Here’s what you need to know if you want to get car insurance with a low credit score:

Shop Around (Don’t Just Take The First Offer!)

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This is the most important tip of all. Every insurance company has its way of weighing your credit score. Some place a significant emphasis on it, while others care more about your driving history or your car's safety features.

Don't just accept the first quote you get. Compare at least three or four different companies. You might be surprised at how much prices can vary for the same coverage.

Tip: Use online comparison tools to save time.
Example: Someone with a low credit score in Texas might get quotes ranging from $1,400 to over $3,000 per year, just by checking different insurers.

Look For Insurers That Don’t Use Credit Score (Or Use It Less)

Not every insurance company relies heavily on credit information. Some specialise in helping drivers with less-than-perfect credit or unique situations.

Regional companies and insurance agents that work with multiple brands can be beneficial in this regard.
In a handful of states, including California, Hawaii, Massachusetts, and Michigan, the use of credit scores to set car insurance rates is prohibited. If you live in one of those places, you won't have to worry about this factor.

Consider Pay-Per-Mile Or Usage-Based Insurance

Here's a fresh idea: If you don't drive much or are a very safe driver, usage-based insurance might be a smart alternative. Companies offering this type of coverage base their rates on how much you drive and how you drive, rather than focusing so much on your credit.

You’ll usually install a small device in your car or use an app on your phone.
Drive safely and keep your mileage low? You could score significant discounts, even with a low credit score.

Choose The Right Coverage Amount

If money is tight, consider carefully how much insurance you truly need. Most states require a minimum level of liability coverage, but you can adjust things like comprehensive and collision coverage to lower your monthly bill.

Higher deductibles mean lower premiums, but make sure you can afford the deductible if you have a claim.
Review your policy every year. If your car is getting older, you might not need as much coverage as you did before.

Bundle Policies For Extra Savings

Do you already have renters' or homeowners' insurance? Bundling it with your car insurance is often a quick way to save 10-20% or more.

Example: If you insure both your car and your home through the same company, many insurers offer a “multi-policy discount,” regardless of your credit score.

Ask About Special Discounts

Don’t be shy—ask every insurer about available discounts. There are lots of ways to save that have nothing to do with your credit score:

Safe driver discounts
Good student discounts
Discounts for anti-theft devices or safety features
Lower rates for automatic payments or paperless billing

Sometimes, just asking can uncover savings you didn’t know existed.

Improve Your Credit Over Time

It's true: Even small steps to improve your credit score can lead to lower car insurance rates in the future.

Pay bills on time
Reduce outstanding debt
Check your credit report for mistakes (and fix them!)
Avoid applying for lots of new credit accounts at once

Insurance companies usually check your credit score when you first sign up, and sometimes when you renew. If your score goes up, don’t forget to ask your insurer to re-run your quote. You might qualify for a lower rate!

Making Smart Choices With A Low Credit Score

Let’s be honest—having a low credit score can make life feel complicated. But when it comes to car insurance, you’ve got more options than you might think. Start by comparing quotes, check out smaller or regional insurers, and see if you qualify for extra discounts.

Don't forget, your credit score isn't set in stone. Keep an eye on your progress and review your insurance policy regularly. With a bit of persistence and the correct information, you can find coverage that suits your needs and budget.