How Do You Get Car Insurance with Bad Credit?
In a Nutshell: Bad credit can increase your car insurance premium by 70–100% compared to someone with excellent credit, costing you an extra $500–$1,500 per year. In most states, insurers are allowed to use credit-based insurance scores. The best approach: shop around (some insurers weigh credit less heavily), improve your credit over time, and use usage-based insurance as an alternative.
How Credit Score Impacts Premiums
| Credit Tier | Credit Score Range | Average Annual Premium (Full Cov) | Premium Index |
|---|---|---|---|
| Excellent | 750+ | $1,500 | 100 (baseline) |
| Good | 700–749 | $1,720 | 115 |
| Fair | 650–699 | $2,000 | 133 |
| Poor | 550–649 | $2,550 | 170 |
| Very Poor | Below 550 | $3,100 | 207 |
A driver with very poor credit pays more than double what a driver with excellent credit pays — a $1,600/year difference.
Insurers More Lenient on Credit
| Insurer | Credit Weight | Best For | Notes |
|---|---|---|---|
| Geico | Moderate | Good drivers with fair credit | Low base rates help |
| Progressive | Low-Moderate | Fair to poor credit | Usage-based (Snapshot) option |
| The General | Minimal | Poor credit, high-risk | Specializes in non-standard |
| Direct Auto | Minimal | Very poor credit | High-risk specialist |
| SafeAuto | Minimal | Poor credit, min coverage | Low down payments |
| Root Insurance | None (uses driving data) | Bad credit, good driving | Phone-based monitoring |
If you have poor credit, avoid insurers known for heavy credit weighting (Allstate, Farmers). Try Progressive or Geico first.
States Where Credit Is Not a Factor
| State | Rule |
|---|---|
| California | Credit scoring banned entirely |
| Hawaii | Credit scoring banned entirely |
| Massachusetts | Credit scoring banned entirely |
| Michigan | Credit scoring banned entirely |
| Washington | Credit scoring banned entirely |
| Maryland | Restrictions on use |
| Oregon | Limited use |
If you live in one of these states, your credit will not affect your car insurance premium. In all other states, improving your credit directly lowers your rates.
How to Lower Rates with Bad Credit
| Strategy | Potential Savings | Timeframe |
|---|---|---|
| Shop around | $300–$1,000/year | Immediate |
| Use usage-based insurance | 10–40% | Immediate |
| Bundle home/renters + auto | 10–25% | Immediate |
| Increase deductibles | 15–30% | Immediate |
| Pay in full (not monthly) | 5–10% | Immediate |
| Take defensive driving course | 5–10% | Immediate |
| Improve credit score | 10–100% | 3–12 months |
| Dispute credit report errors | Variable | 1–3 months |
Quick Credit Improvement for Insurance
| Action | Score Impact | Timeframe |
|---|---|---|
| Pay down credit cards to under 30% utilization | +20–50 points | 1–2 months |
| Dispute errors on credit report | +10–50 points | 1–3 months |
| Set up auto-pay for all bills | Avoids late payments | Ongoing |
| Keep old credit accounts open | Protects credit history length | Ongoing |
| Limit new credit applications | Avoids hard inquiries | 6–12 months |
Usage-Based Insurance: A Credit Workaround
Usage-based insurance (UBI) programs base rates on actual driving behavior instead of credit:
| Program | How It Works | Potential Savings |
|---|---|---|
| Progressive Snapshot | App or device tracks speed, braking, mileage | 10–30% |
| Allstate Drivewise | App tracks driving behavior | 10–25% |
| State Farm Drive Safe & Save | Uses vehicle data or phone app | 10–30% |
| Geico DriveEasy | Phone app tracks driving | 10–30% |
| Nationwide SmartRide | Device or app tracks driving | 10–30% |
| Root Insurance | 100% phone-based telematics | 20–50% |
UBI programs are ideal for drivers with bad credit but safe driving habits. You can save 10–40% regardless of your credit score.
Key Takeaways
- Bad credit can double your premium — $1,600/year more than excellent credit
- Some insurers (Progressive, Geico) weigh credit less than others
- 5 states ban credit scoring: California, Hawaii, Massachusetts, Michigan, Washington
- Usage-based insurance ignores credit — good drivers with bad credit save the most
- Improving credit takes 3–12 months but has the biggest long-term impact
- Shopping around is essential — premium differences are larger for bad-credit drivers
- Bundle policies and increase deductibles for immediate savings
Last updated: July 2026
Disclaimer: This article provides general information about getting car insurance with bad credit. State regulations and insurer policies vary. Always obtain personalized quotes and consult with a licensed insurance agent for advice specific to your situation.