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Danny Smith is a licensed property and casualty insurance agent who has written for Compare.com since 2024. A former insurance editor, he specializes in auto, home, and pet insurance. He works to translate his insurance expertise into digestible, easy-to-understand content for drivers, homeowners, and pet owners alike.
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Nick Versaw leads Compare.com's editorial department, where he and his team specialize in crafting helpful, easy-to-understand content about car insurance and other related topics. With nearly a decade of experience writing and editing insurance and personal finance articles, his work has helped readers discover substantial savings on necessary expenses, including insurance, transportation, health care, and more. As an award-winning writer, Nick has seen his work published in countless renowned publications, such as the Washington Post, Los Angeles Times, and U.S. News & World Report. He graduated with Latin honors from Virginia Commonwealth University, where he earned his Bachelor's Degree in Digital Journalism.
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In some cases, you can get car insurance without a credit check, but it’s not typically an option. Most major insurance companies factor your credit history into a credit-based insurance score when calculating rates because they’ve found it helps predict the likelihood of you filing a claim.
That said, not every company uses credit history when determining rates — Root, Lemonade, and Metromile are a few that don’t. Similarly, Massachusetts, California, Hawaii, and Michigan have banned insurers from considering credit histories when calculating rates.
In this guide, we’ll explore how your credit history affects your car insurance rates and how you can get car insurance without a credit check.
USAA is the cheapest car insurance company for drivers with poor credit, at $93 per month.
Massachusetts, California, Hawaii, and Michigan prohibit insurers from using credit history when determining car insurance rates.
One way to improve your credit score is by keeping your credit utilization under 30%.
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You can get car insurance without a credit check in only a couple of situations if you don’t live in Massachusetts, California, Hawaii, or Michigan. Some non-standard insurers that specialize in insuring high-risk drivers may not require credit checks, like CURE and Dillo.
But the most common way to get car insurance without a credit check is by opting for usage-based car insurance. These programs don’t have fixed insurance premiums. Instead, they adjust costs based on your driving data — which means usage-based insurers typically don’t check your credit history.
Root and Metromile are two usage-based insurers that won’t check your credit. But usage-based insurance isn’t for everyone.
Usage-based insurance is a type of car insurance policy that calculates your rates based both on how you drive and how often you’re on the road. With these policies, insurers track things like speed, braking, and mileage through either a mobile app or a device you install in your car.
Good driving can result in cheap premiums, but bad driving can get expensive. Usage-based policies may make sense if you don’t commute, live in a very rural area, or don’t drive very often.
Compare personalized quotes from dozens of top insurance companies.
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Credit history affects car insurance rates because insurers see a correlation between your credit history and the likelihood of filing a claim. Statistically, a spotty credit history — which typically corresponds to a lower credit score — indicates a higher risk of a claim, while a high credit score indicates reliability. Insurers charge drivers with good credit lower rates than drivers with poor credit.
Two companies primarily determine the average credit scoring ranges: FICO and VantageScore. Both companies use a range from 300 to 850 with slightly different segmentations. Here’s how those ranges break down:
Excellent: 800–850
Very Good: 740–799
Good: 670–739
Fair: 580–669
Poor: 300–579
Let’s take a look at how average auto insurance rates break down based on these ranges, according to Compare.com data.
As your credit score improves, your car insurance rates typically begin to decrease. Drivers with excellent credit pay an average of $116 per month for coverage, while people with poor credit pay $162, on average.
Car insurance rates vary among insurance companies due to a wide variety of factors, not just credit. Every insurer weighs numerous factors — such as driving record, location, and age — differently, so rates for the same driver will be different at each company. That’s why it’s crucial to compare car insurance quotes from multiple insurers before buying a policy.
The table below highlights the five cheapest car insurance companies for drivers with poor credit scores, according to Compare.com data. These insurers are a good place to start if you’re concerned about how your credit will affect your rates.
Insurance Company  | Average Monthly Premium |
|---|---|
| USAA | $93 |
| Safeco | $98 |
| Auto-Owners | $99 |
| GEICO | $103 |
| Allstate | $108 |
We found that USAA is the cheapest car insurance company for drivers with less-than-ideal credit. Its average rate for this group is just $93 per month, making it an affordable option, even without considering your credit history.
Compare personalized quotes and find the policy for you.
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The state you live in also has a significant effect on your car insurance rates — no matter how safe of a driver you are or how good your credit is. Each state has varying accident and crime rates, differing repair costs, and unique regulations, and insurers consider all of these factors when setting rates. Drivers in states with severe weather, flooding risks, and high traffic rates may face higher rates, while ones in states with lower population densities or less crime will typically see cheaper premiums.
The table below shows the average rates for drivers with both good and poor credit in each state, along with the difference between the two, according to Compare.com data.
State | Average Monthly Premium: Good Credit | Average Monthly Premium: Poor Credit | % Increase |
|---|---|---|---|
| Alabama | $103 | $132 | 28% |
| Arizona | $131 | $181 | 38% |
| Arkansas | $137 | $208 | 52% |
| California | $159 | $159 | 0% |
| Colorado | $133 | $180 | 35% |
| Connecticut | $245 | $309 | 26% |
| Delaware | $152 | $200 | 32% |
| Florida | $245 | $323 | 32% |
| Georgia | $179 | $239 | 34% |
| Hawaii | $81 | $108 | 33% |
| Idaho | $86 | $86 | 0% |
| Illinois | $125 | $160 | 28% |
| Indiana | $94 | $131 | 39% |
| Iowa | $99 | $131 | 32% |
| Kansas | $110 | $158 | 44% |
| Kentucky | $184 | $260 | 41% |
| Louisiana | $221 | $265 | 20% |
| Maine | $122 | $152 | 25% |
| Maryland | $211 | $257 | 22% |
| Massachusetts | $140 | $140 | 0% |
| Michigan | $280 | $280 | 0% |
| Minnesota | $138 | $183 | 33% |
| Mississippi | $109 | $164 | 50% |
| Missouri | $146 | $206 | 41% |
| Montana | $135 | $167 | 24% |
| Nebraska | $134 | $167 | 25% |
| Nevada | $222 | $287 | 29% |
| New Hampshire | $79 | $130 | 65% |
| New Jersey | $153 | $209 | 37% |
| New Mexico | $124 | $165 | 33% |
| New York | $169 | $213 | 26% |
| North Carolina | $77 | $94 | 22% |
| North Dakota | $108 | $135 | 25% |
| Ohio | $94 | $123 | 31% |
| Oklahoma | $133 | $191 | 44% |
| Oregon | $130 | $151 | 16% |
| Pennsylvania | $129 | $161 | 25% |
| Rhode Island | $150 | $188 | 25% |
| South Carolina | $201 | $251 | 25% |
| South Dakota | $96 | $140 | 46% |
| Tennessee | $114 | $156 | 37% |
| Texas | $170 | $230 | 35% |
| Utah | $127 | $171 | 35% |
| Vermont | $104 | $127 | 22% |
| Virginia | $127 | $149 | 17% |
| Washington | $143 | $181 | 27% |
| Washington, D.C. | $163 | $216 | 33% |
| West Virginia | $110 | $164 | 49% |
| Wisconsin | $88 | $118 | 34% |
| Wyoming | $101 | $138 | 37% |
If you’re worried that your credit is negatively affecting your car insurance rates, you have a few easy options to improve it. Consider taking some of the following steps to improve your credit score and get cheaper rates:
Pay your bills on time. Your payment history has a major effect on your credit score. Missed or late payments can lower your score and lead to higher car insurance rates.
Use less of your available credit. Try to use less than 30% of your available credit per payment period. Utilizing more than 30% can hurt your score.
Keep older accounts open. Don’t close old credit card accounts if you can avoid it. The average age of your credit affects your credit score — so keeping an account you’ve had open for a while will help you keep your score as high as possible.
Don’t open too many new accounts at once. When you open a new account, you’ll initiate a credit inquiry, which can temporarily lower your score. Opening multiple credit accounts in quick succession can indicate financial stress and negatively affect your rates.
Check for credit errors. Make sure your credit report doesn’t have any mistakes or errors. Address any inaccuracies immediately with your credit bureau.
If you’re still wondering about how to get car insurance with bad credit, take a look at these answers to commonly asked questions.
No, having car insurance doesn’t build credit. But if you pay your car insurance bill late or miss a payment, it could negatively affect your credit score.
USAA, Safeco, and Auto-Owners are a few of the best auto insurance companies for drivers with bad credit, based on our research. They each offer average monthly premiums far below the national average for drivers who have poor credit.
They don’t use your credit score directly — car insurance companies look at your overall credit history to calculate a proprietary “credit-based insurance score” that can affect your premiums. Insurers consider bad credit to be an indicator that a driver is more likely to file a claim, so drivers with low scores typically pay higher rates than people with good credit.
No, past insurance claims don’t hurt your credit score. That said, repeated claims can increase your auto insurance rates, which can make it harder to pay your other bills.
Yes, you can get car insurance with no credit history, but it’s challenging. Most standard insurers consider your credit history when determining rates. But you can get car insurance with usage-based insurers — like Metromile and Root — to avoid your credit history affecting your rates. You can also get insurance coverage with no credit history in Massachusetts, California, Hawaii, and Michigan — the use of credit information is illegal in these states when calculating premiums.
Data Methodology:
Data scientists at Compare.com analyzed more than 50 million real-time auto insurance quotes from more than 75 partner insurers in order to compile the rates and statistics seen in this article. Compare.com’s auto insurance data includes coverage analysis and details on drivers’ vehicles, driving records, insurance histories, and demographic information.
All the rates listed in this article have been collected from a combination of real Compare.com quotes and external insurance rate data gathered in collaboration with Quadrant Information Services. Compare.com uses these observations to provide readers with insights into how auto insurance companies determine their premiums.
Rating Methodology:
Compare.com’s mission is to help our readers make more informed decisions when it comes to their personal finances. Our editorial staff has crafted a proprietary, objective rating formula — the Compare.com Rating — to make it easier for our readers to analyze and compare many of the industry’s most well-known insurers. The score you see referenced in this article is based on several factors, including:
Cost: How the insurer’s average rates compare to its direct competitors and the industry as a whole. This includes available savings opportunities, such as discounts and other factors.
Customer satisfaction: How satisfied existing customers are with the service they receive. This includes the insurer’s scores among various third-party studies, such as the J.D. Power U.S. Insurance Shopping and Claims Satisfaction studies, and the National Association of Insurance Commissioners (NAIC) Complaint Index, among others.
Ease-of-use: How easy it is for policyholders to utilize their policies. This includes mobile app availability, customer service availability, payment flexibility, and other related factors.
Availability: The overall scope of the company’s insurance offerings. This includes available coverage types, national footprint, and other related factors.
Industry reputation: A measure of the insurer’s overall standing within the industry. This includes its AM Best Financial Strength rating, BBB accreditation, and other related factors.
Sources:
Experian, “What Is a Good Credit Score?,” accessed September 26, 2024.
Insurance Information Institute, “Background on: Insurance scoring,” accessed September 26, 2024.
Chase, “Does paying car insurance build your credit history?,” accessed September 26, 2024.
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Danny Smith is a licensed property and casualty insurance agent who has written for Compare.com since 2024. A former insurance editor, he specializes in auto, home, and pet insurance. He works to translate his insurance expertise into digestible, easy-to-understand content for drivers, homeowners, and pet owners alike.
Nick Versaw leads Compare.com's editorial department, where he and his team specialize in crafting helpful, easy-to-understand content about car insurance and other related topics. With nearly a decade of experience writing and editing insurance and personal finance articles, his work has helped readers discover substantial savings on necessary expenses, including insurance, transportation, health care, and more. As an award-winning writer, Nick has seen his work published in countless renowned publications, such as the Washington Post, Los Angeles Times, and U.S. News & World Report. He graduated with Latin honors from Virginia Commonwealth University, where he earned his Bachelor's Degree in Digital Journalism.
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