Compare Best Car Insurance Companies That Don’t Use Credit Scores [2023]
Car insurance companies that don't use credit scores are hard to find. If your credit isn't that great USAA, Nationwide, GEICO, and American Family have the cheapest bad credit car insurance.
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Joel Ohman
Founder & CFP®
Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...
Founder & CFP®
UPDATED: Jun 20, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single company.
Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from top car companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Jun 20, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single company.
Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from top car companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
Looking to purchase car insurance with no credit check is going to be difficult.
Insurance companies believe that a low credit score makes you more likely to file a claim. Basing car insurance rates on credit score is mostly unfair, outlawed in six states, and, unfortunately, an excepted practice.
The great news is participating in usage-based car insurance programs can lower your rates by up to 50%. If you want to find the best car insurance for bad credit, this is a good place to start.
Read on to see bad credit car insurance rates and discounts. Enter your ZIP code to compare free car insurance quotes from top companies.
What are the best car insurance companies that don’t use credit scores?
Do all insurance companies use credit scores to determine rates? No, but most companies do. Getting auto insurance with no credit check from a company should actually raise a red flag or two. Companies generally want to be mindful of a driver’s credit score, and if they don’t care, chances are they don’t mind bending other rules.
Research has shown, numerous times, that consumers with lower credit scores or more negative items on their credit reports are more likely to be in an accident than policyholders who have sterling credit reputations.
The reasons for this are unknown, but the correlation seems to be rather hard to disprove. For this reason, a shoddy credit history will cause an insurance company to charge slightly higher rates to insurance customers who have had financial problems in the past.
Since the percentage of companies using credit scores in rate setting is so high, you may find it difficult to locate a car insurance company that does not check credit.
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What are the best car insurance companies for drivers with bad credit?
We’ve taken a look at the top insurance companies in the financial market to help you find the cheapest bad credit car insurance.
How much is bad credit car insurance?
Let’s first explain what bad credit is. Credit can be divided into three ranges.
- Good Credit (670-739)
- Fair Credit Score (580-669)
- Poor Credit Score (300-579)
If you know your score or the range of your score, you can get a general idea of how much your rates will be with each company.
Company Poor Credit Fair Credit Good Credit
Allstate $2,254 $1,604 $1,351
Farmers $3,281 $1,776 $1,578
Geico $1,681 $1,212 $1,047
MetLife $4,248 $2,332 $1,686
Nationwide $1,781 $1,518 $1,341
Progressive $2,475 $1,792 $1,381
State Farm $2,527 $1,482 $1,235
Travelers $2,490 $1,721 $1,525
USAA $1,460 $936 $883
In general, the companies that offer the cheapest rates for drivers with bad credit are USAA, Nationwide, Geico, and American Family but since so many other factors go into determining your rate, it’s good to get multiple quotes.
However, also important to consider is which companies increase rates more for drivers with bad credit. The companies that are easier on drivers with bad credit as compared to those with good credit are Travelers, Progressive, Farmers, and Nationwide.
Bad credit raises your car insurance rates by $165.39/month on average.
Companies often look at particular parts of your credit report rather than basing their decision on only the score.
How does credit affect car insurance rates state-by-state?
The ability of a car insurance company to check your credit score is determined by your state’s insurance commissioner.
In most states, it is perfectly legal for an insurance company to check your credit. That’s why it’s difficult to find car insurance without a credit check.
In the states where it isn’t legal, such as California, insurance companies don’t run your credit to determine your rates. There are additional credit-check car insurance laws in Michigan, Hawaii, Oregon, Utah, and Massachusetts.
For all other states, expect a difference in rates for drivers with good credit and bad credit.
State Good Credit Poor Credit How much more you will pay
AK $2,314 $3,352 31%
AL $2,961 $4,769 38%
AR $3,390 $5,071 33%
AZ $2,956 $5,008 41%
CO $3,072 $4,956 38%
CT $3,653 $5,954 39%
DC $3,411 $5,903 42%
DE $4,564 $7,968 43%
FL $3,424 $6,411 47%
GA $3,887 $6,478 40%
IA $2,417 $3,689 34%
ID $2,298 $3,641 37%
IL $2,596 $4,244 39%
IN $2,763 $4,127 33%
KS $2,846 $4,167 32%
KY $3,997 $6,877 42%
LA $4,551 $7,197 37%
MD $3,447 $6,108 44%
ME $2,077 $3,323 38%
MN $3,340 $6,183 46%
MO $2,551 $4,431 42%
MS $2,882 $4,717 39%
MT $2,564 $4,139 38%
NC $2,935 $4,045 27%
ND $3,219 $5,557 42%
NE $2,714 $4,335 37%
NH $2,448 $4,137 41%
NJ $4,199 $7,260 42%
NM $2,984 $4,111 27%
NV $3,721 $6,299 41%
NY $3,152 $5,959 47%
OH $2,289 $3,543 35%
OK $3,253 $5,355 39%
PA $3,257 $5,075 36%
RI $4,258 $6,063 30%
SC $2,999 $4,898 39%
SD $3,059 $5,237 42%
TN $2,859 $4,709 39%
TX $3,014 $5,189 42%
VA $1,953 $2,895 33%
VT $2,309 $4,544 49%
WA $2,432 $3,746 35%
WI $2,401 $3,775 36%
WV $3,193 $5,242 39%
WY $2,423 $3,780 36%
In New Mexico, North Carolina, and Rhode Island, drivers with bad credit will pay car insurance rates that are up to only 30 percent higher than those that have good credit.
In Minnesota, Florida, New York, and Vermont, drivers with bad credit will pay car insurance rates that are approaching 50 percent higher than those that have good credit.
If you aren’t sure whether this is a legal practice in your state, you can do a search for your state’s department of insurance on the National Association of Insurance Commissioners website, under the States & Jurisdictions map.
How can I save money on my car insurance rates if I have bad credit?
While poor credit is one negative factor in setting car insurance rates, there are some things you can do to offset the additional cost you may be paying. The first step is to speak directly to your car insurance agent or company and ask if you’re eligible for any discounts.
Some of the discounts that are available with car insurance companies include a good driver discount, good student discount, multi-policy discount, and pay-in-advance discount.
A multi-policy discount is available to you if you have two or more insurance policies with the same insurance company. The policies can be for two vehicles, one vehicle and a homeowners policy, or even a life insurance policy.
A pay-in-advance car insurance discount is what it sounds like. Basically, if you pay for your entire insurance policy upfront, whether for a six-month policy or a 12-month policy, you can receive a discount.
Finally, a good student discount is available to parents who have a teenage driver on their policy. If the teenage driver has at least an 85 average, the policy is eligible for a discount.
This is because students who have good grades are considered more responsible, and in turn, more likely to be good drivers.
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How much is usage-based car insurance for drivers with bad credit?
Usage-based car insurance is an excellent way to prove to insurance companies that people with bad credit aren’t necessarily bad drivers.
Many car insurance companies offer a discount program that bases your car insurance rates on either driving habits or how much you drive. Some companies have both.
Company Driving Device or Driving App Discount
Allstate 20
American Family 40
Esurance 25
Liberty Mutual 30
MetLife 15
Nationwide 40
Progressive 20
Safeco 30
State Farm 50
The Hartford 10
Travelers 30
USAA 5
You can participate in these programs by simply plugging their device into your car or downloading and using their driving app.
How does credit score affect car insurance rates?
Are there car insurance companies that don’t check credit when calculating car insurance rates and issuing car insurance policies? Car insurance companies are all about risk.
They assume the risk that you may be responsible for a car accident while driving or incur some other type of loss involving your vehicle in exchange for a premium that you pay monthly or yearly.
Premium rates are set according to statistics that help determine what type of risk a driver presents. Many factors are considered when setting insurance rates. These factors include age, gender, experience, claims history, driving record, where you live, the type of car you drive, and more.
Your credit history is one of the newer variables that insurers now consider when setting your car insurance rates. How you’ve handled your credit in the past is a significant factor in how much you’ll pay for car insurance.
A visit to the website of the insurance regulatory commission in any given state, or a call made to the commission’s toll-free number, will also provide information about no credit check car insurance providers in your state.
However, many times the non-credit-based car insurance rates are much higher than regular car insurance rates.
The companies using the no credit check tagline in their marketing campaigns are targeting a riskier and often more desperate audience.
Finding a provider that will cover them at anything resembling a reasonable rate may seem like a gift to these drivers.
Why does your credit affect car insurance rates?
Credit scores are used by most companies to set rates. Credit scores have a strong correlation with a person’s likelihood to make insurance claims.
In fact, people with poor credit scores are much more likely than those with good credit scores to make claims.
Since statistical evidence of this fact came to light, more insurance companies have considered credit scores as one of the factors when determining how much a client will pay for car insurance coverage.
Some industry experts state that more than 90% of companies now use credit scores in determining rates.
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How much does my credit score weigh into my car insurance rates?
Each insurance company weighs rating factors differently.
While your driving record is the factor that is considered first, the other factors each have their own weight, which is assigned by the underwriters of each individual insurance company. This contributes to the variation in insurance price quotes from one company to another.
The use of credit scores for insurance rating is newer than other factors and therefore is not treated uniformly by all insurance companies.
Credit scores vs. credit-based insurance scores: What’s the difference?
Credit scores and credit-based insurance scores are two entirely different things.
To any entity that looks at your credit score, even if it’s not a car insurance company, the credit score is only a prediction to show how likely it is you will go three months without paying your bills in the next two years.
Credit-based insurance scores, on the other hand, are designed to predict whether or not you’re likely to file an insurance claim, so insurance companies likely look at the individual items on your credit report.
What do car insurance companies look for on my credit report?
Car insurance companies may look for particular things on your credit report rather than the entire credit score to determine your credit-based insurance score.
Car insurance companies like to see the following on your credit report:
- Long-established credit history
- No late payments or past-due accounts
- Open accounts in good standing
Car insurance companies don’t want to see the following on your credit report:
- Past-due payments
- Accounts in collection
- A high amount of debt
- The number of accounts
- comparing total loans against your available credit
- Not enough credit or history
- Multiple credit inquiries
Other things they may see but not necessarily hold against you:
- Bankruptcy
- Foreclosure
- Repossession
As anyone who’s familiar with credit scores knows, there is a huge range of possible scores a consumer can have. Therefore, underwriters have a wide variety of possibilities to consider.
Do car insurance companies check credit to simply look at good credit versus bad credit? They often actually look at the details of your credit history, as provided by one of the credit reporting bureaus.
Two companies have designed models to help insurers use credit information for insurance scoring.
ChoicePoint and FICO have made it easier for many insurance companies to use your personal credit score, and some companies have their own system in place.
However, before they can access your information, they must get your permission.
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How do I improve my credit and get cheaper car insurance?
How can I get my credit score up to bring my car insurance rates down?
There are several simple ways to improve your credit score, although most of them take a long time to help.
The first way is to make any loan or credit card payments that you have on time. Most credit cards have set payment amounts that are fairly low, so making the payments on time will help raise your credit score.
Another way to help raise your credit score is to keep a low balance on your credit cards. If you have a large credit limit on your cards, it shows that you are responsible for your finances and your credit, and therefore will help keep your credit score high.
By taking small steps to ensure that you’re responsible with your finances, you can save money on your car insurance rates.
Does a good driving record help lower my car insurance rates if I have bad credit?
You may be asking, can my driving history lower my car insurance rates? In short, yes, and you can keep them low even if you have bad credit. Most car insurance companies will look very favorably on a safe driving record, and it may even offset any increase in cost from a poor credit rating.
If you haven’t had any accidents or moving violations over the previous three years, you’re considered a good driver.
Frequently Asked Questions
Why do some car insurance companies use credit scores?
Car insurance companies may use credit scores as one of many factors to assess risk and determine premium rates. They believe that credit scores are indicative of a person’s financial responsibility and may correlate with their likelihood of filing claims.
Which car insurance companies do not use credit scores?
Several car insurance companies do not use credit scores as a factor in determining rates. Some of these companies include:
- Geico
- USAA
- Progressive
- State Farm
- Liberty Mutual
- Allstate
- Nationwide
- Farmers Insurance
If a car insurance company does not use credit scores, what factors do they consider instead?
Car insurance companies that do not use credit scores often consider other factors to determine rates. These may include:
- Driving record: The history of accidents, traffic violations, and claims.
- Vehicle information: The make, model, and age of the car.
- Personal information: Age, gender, marital status, and ZIP code.
- Annual mileage: The estimated number of miles driven per year.
- Coverage options: The type and level of coverage chosen.
Are car insurance rates typically higher with companies that don’t use credit scores?
Car insurance rates can vary depending on multiple factors, including the insurance company. While companies that don’t use credit scores may not consider this factor, they still consider other relevant information. Rates will be based on factors such as driving history, vehicle information, and personal details. It’s best to obtain quotes from multiple insurance companies to compare rates and coverage options.
Can I get a quote from car insurance companies that don’t use credit scores?
Yes, you can obtain a quote from car insurance companies that don’t use credit scores. Most insurance companies have online portals or customer service representatives who can assist you in getting a quote based on your specific details. Provide accurate information to receive an accurate quote.
Free Car Insurance Comparison
Enter your ZIP code below to view companies that have cheap car insurance rates.
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Joel Ohman
Founder & CFP®
Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...
Founder & CFP®
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.