You probably know that your credit score can affect your ability to get a loan and the interest rate you’ll pay. But did you know that your credit history also impacts your car insurance rate?
The better your credit, the lower your car insurance costs.
If your credit score isn’t perfect, though, there’s no need to panic. Every driver can save on car insurance costs when they compare quotes from top companies using Insurify. Note that comparing car insurance quotes won’t hurt your credit score! Best part? It’s 100% free. Start comparing today.
Drivers with excellent credit can expect to pay as much as $2,000 less annually for car insurance than drivers with poor credit.
The cheapest insurer we found for drivers with poor credit is Metromile, with average rates of $144 per month.
California, Hawaii, Massachusetts, Michigan, and Washington all ban insurers from using a driver’s credit score when underwriting policies and setting rates.
Table of contents
- Cheapest Car Insurance for Drivers with Poor Credit
- Cheapest Car Insurance for Drivers with Average Credit
- Cheapest Car Insurance for Drivers with Good Credit
- Cheapest Car Insurance for Drivers with Excellent Credit
- How does credit score affect car insurance quotes?
- How do I know what my credit score is?
- Do all insurance companies check your credit score?
- Why Insurance Companies Do Credit Checks
- Discounts for Drivers with Good Credit
- Frequently Asked Questions
- Cheap Car Insurance for Everyone, Regardless of Credit Score
Cheapest Car Insurance for Drivers with Poor Credit
Poor credit is a score that falls below 630. If your credit isn’t the greatest, it’s not the end of the world when it comes to car insurance. These companies offer the cheapest car insurance quotes for drivers with less-than-desirable credit scores.
|Insurance Company||Cheapest Quotes with Poor Credit|
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Cheapest Car Insurance for Drivers with Average Credit
Credit scores are in the average range between 630 and 689. The better your credit, the cheaper your car insurance.
|Insurance Company||Cheapest Quotes with Average Credit|
Cheapest Car Insurance for Drivers with Good Credit
Good credit is generally considered to be a score between 690 and 719. Drivers with good credit enjoy some of the lowest car insurance rates available.
|Insurance Company||Cheapest Rates for Good Credit|
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Cheapest Car Insurance for Drivers with Excellent Credit
A score above 720 is considered excellent. Drivers with these high credit scores can expect to find the lowest rates for car insurance.
|Insurance Company||Cheapest Rates for Average Credit|
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How does credit score affect car insurance quotes?
Does credit score affect car insurance rates?
Generally speaking, drivers with good credit will pay less for car insurance than drivers with poor credit. In fact, drivers with excellent credit can expect to pay as much as $2,000 less per year on insurance premiums than drivers with poor credit.
Your credit information helps determine your insurance score, a statistical tool used by auto insurance companies to predict the chances (and potential cost) of you filing a car insurance claim. In other words, your insurance score predicts potential insurance losses. Your insurance score, therefore, directly affects your insurance pricing.
Note that your credit-based insurance score is separate from your FICO or Vantage score, which lenders use to determine your credit risk. Your credit rating factors in differently depending on the company you use, and insurance companies don’t have a unified tier system for what qualifies as good, average, or poor credit.
How do I know what my credit score is?
It’s easy to check your credit score. The Federal Trade Commission suggests that you check your credit with the three major credit bureaus (Equifax, Experian, and TransUnion) each year to monitor your score (as well as inquiries about your score) and to prevent identity theft. If you see inaccuracies, you have the right to contest them and correct your credit history.
Do all insurance companies check your credit score?
Most insurers will check your credit score. Only five states—California, Hawaii, Massachusetts, Michigan, and Washington—prohibit the use of credit scores when insurers are determining your auto insurance rate.
Note that getting a car insurance quote will not hurt your credit score. This is because there are two types of credit checks—hard inquiries (which do impact your score) and soft inquiries (which don’t impact your score). When an insurance company looks into your credit, it’s considered a soft inquiry, as opposed to the hard inquiries by credit and lending companies.
Why Insurance Companies Do Credit Checks
Statistical data analyses, including a study by the Federal Trade Commission, show that credit-based insurance scores can accurately predict future insurance claims. Specifically, not only are policyholders with low credit scores more likely to file claims, but their claims tend to be more expensive. Because of this, companies use poor credit as a sign of risk, increasing rates.
Other factors that affect your monthly car insurance premium include your age and gender, type of car, driving record, claims history, the deductible you select, and even your marital status.
Discounts for Drivers with Good Credit
A good credit score shows insurers that you’re responsible and trustworthy. Because of this, some companies like Progressive and Nationwide offer good credit discounts. Be sure to ask your insurer if they offer a discount based on your credit rating.
Frequently Asked Questions
Virtually every insurance company will conduct a soft inquiry into your credit score unless you’re in one of the states that prohibits it. Drivers with excellent credit can expect to pay as much as $2,000 less per year in car insurance premiums than those with bad credit.
Unless you live in one of the states that forbid insurance companies from using credit scores to determine rates, it may be impossible to get a quote without a credit check. Some companies might use telematics to determine usage-based rates, but this isn’t common.
You can generally expect to pay higher premiums if you have a low credit score. When shopping for any insurance, you’ll find the best rate by shopping around with the Insurify price comparison tool. Be sure to maximize potential savings based on life changes. If your credit or driving record improves or if you move, get married, or turn 25, it’s time to look for a better deal.
With time and effort, you can improve your personal finances. Be sure to pay all your bills and credit card payments on time–this directly impacts your credit score. Pay down as much of your debt as you can, as quickly as you can; accounts in collection should be paid down first. Then, keep your credit utilization (the amount of your available credit that you’re using) low.
Cheap Car Insurance for Everyone, Regardless of Credit Score
Whether your credit score is high or low, you should always shop around and compare car insurance rates for car insurance (and all types of insurance!). The Insurify price comparison tool makes it quick and simple. Don’t forget to compare prices annually to save the most money!
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Data scientists at Insurify analyzed more than 40 million real-time auto insurance rates from our partner providers across the United States to compile the car insurance quotes, statistics, and data visualizations displayed on this page. The car insurance data includes coverage analysis and details on drivers' vehicles, driving records, and demographic information. Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Service's database of auto insurance rates. With these insights, Insurify is able to offer drivers insight into how companies price their car insurance premiums.