There are many factors insurance companies use to determine your auto insurance premium, and, in most states, your credit score is one of them. Your credit-based insurance score is not the same as your credit rating used by lenders when you apply for a credit card or loan. Insurers look at your money management history to determine your insurance risk, like if you pay your bills on time and if you have been in collections or filed bankruptcy before.

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If you have a limited credit history or bad credit, you could pay higher insurance premiums than someone with excellent credit.

Why do insurance companies care about my credit score?

Insurance companies base premiums and their decision to offer you insurance coverage on how risky you are to insure. People with negative money patterns—and usually a poor credit score—are considered a riskier person to insure, so the insurance company may offer coverage at a higher rate than a less risky individual. Insurance companies use specific parts of your credit report to create your credit-based insurance score, including:

  • Credit history length
  • Collections
  • Bankruptcies
  • New credit applications
  • Outstanding debt
  • Late payments

Some states do not allow credit to be used as a factor when determining car insurance premiums. California, Hawaii, Michigan, Massachusetts and Washington do not permit insurance companies to factor in your credit score when determining your insurance premiums, but all other states consider your credit score when calculating rates to some degree.

How does credit impact my insurance premiums?

The worse your credit history is, the higher your insurance premiums may be. In the U.S., the average cost of car insurance is $1,674 per year for full coverage with good credit. Using rates provided by Quadrant Information Services for annual full coverage premiums, drivers with excellent credit pay on average $1,487 while a driver with average credit may pay $1,865 a year. For the average driver with poor credit, rates are much higher at $3,873 per year for the same coverage.

Poor Average Good Excellent
$3,873 $1,865 $1,674 $1,487

What happens if I do not have a credit history?

If you do not have a credit history, you may have trouble getting car insurance and could pay more than the average driver. It is still possible to get car insurance with no credit history – but it may be more difficult. Fortunately, credit history is not the only criteria insurance companies use to calculate auto insurance premiums. Personal information, location and vehicle factors are also used to determine if you are eligible for auto insurance when your credit check comes back with no history.

No credit check car insurance

Outside of states that do not allow credit checks—California, Hawaii, Michigan, Massachusetts and Washington—you likely won’t find “no credit check” auto insurance companies. But, you have other options that may potentially help you get affordable auto insurance, even if you have bad credit or a limited credit history.

One option is to consider telematics, or usage-based car insurance. Companies that offer usage-based programs use telematics devices to track your driving behaviors. Telematics may track:

  • Phone usage while driving
  • Miles driven
  • Fast accelerations
  • Hard braking
  • Time of day driven

The safer and more responsible you are behind the wheel, typically the better your chances are at getting cheaper car insurance.

What other factors are used in determining car insurance premiums?

In the states that consider it, your credit score and history is not the only thing that is considered when an insurance company sets your auto insurance premiums. In addition, they may consider factors such as:

  • Your zip code (excludes CA & MI)
  • How old you are (excludes HI)
  • Your driving and claims history
  • How long you’ve been licensed
  • The make and model of the car you drive
  • The type of coverage you need
  • Safety features on your car
  • How you purchase insurance (in person, online, before your next renewal, etc.)
  • Annual mileage
  • Discount eligibility
  • Vehicle ownership status

Rate structures vary by insurance company, so the company you choose also impacts your insurance costs.

How can I save money on my car insurance?

Auto insurance companies that don’t check credit are almost impossible to find in states that allow it. If you want to save money on your car insurance, even in states that don’t require a credit check, consider these tips:

  • Ask about discounts: Insurance companies offer a list of discounts. Make sure you are taking advantage of each one for which you are eligible. Whether you are renewing or shopping for new car insurance, ask about the discounts the company offers.
  • Avoid tickets and accidents: Maintaining a clean driving record not only gets you the best rates, it also opens up more discount opportunities. The good driving and accident-free discounts are for drivers without tickets and at-fault accidents. If you get into an at-fault accident, it could increase your rates and you could lose your good driving discounts.
  • Increase deductibles: If you have full coverage, you may be able to save money by increasing your deductible. The deductible amount has to be paid if you file a claim, so be sure you can pay it if you decide to increase your deductible.
  • Shop around: Even when you quote the same coverage, you will probably get a different premium with each insurance company. You may be able to save money without sacrificing coverage by getting quotes from multiple companies. Compare the quotes to get the best deal on the coverage you need.

Frequently asked questions

What are the best car insurance companies for someone with bad credit?

Companies that are best for drivers with bad credit include those that specialize in high-risk drivers. Some of the best car insurance companies for someone with bad credit are Allstate, Direct Auto and Progressive.

How can I find out what my credit-based insurance score is?

Insurance companies use information from your credit report to create your credit-based insurance score. The companies use proprietary formulas to create your credit-based insurance score, which usually varies by company. Though you may not be able to find out what your credit-based insurance score is, you can download a free copy of your credit report to get the same information used by insurance companies at

How can I build credit?

You may be able to build credit by applying for and using credit cards responsibly. You could also apply for a personal loan, car loan or mortgage, and make your payment on time to help establish a good credit profile.


Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:

  • $100,000 bodily injury liability per person
  • $300,000 bodily injury liability per accident
  • $50,000 property damage liability per accident
  • $100,000 uninsured motorist bodily injury per person
  • $300,000 uninsured motorist bodily injury per accident
  • $500 collision deductible
  • $500 comprehensive deductible

To determine minimum coverage limits, Bankrate used minimum coverages that meet each state’s requirements. Our base profile drivers own a 2019 Toyota Camry, commute five days a week and drive 12,000 miles annually.

These are sample rates and should only be used for comparative purposes.

Credit: Rates were calculated based on the following insurance credit tiers assigned to our drivers: “poor, average, good (base), and excellent.” Insurance credit tiers factor in your official credit scores but are not dependent on that variable alone. The following states do not allow credit to be a factor in determining auto insurance rates: California, Hawaii, Massachusetts, Michigan, Washington.