How to Get Car Insurance with a Bad Credit Score (2023 Data)

You just got a renewal quote that's $150/mo higher than last year, or you're shopping for your first policy after a repossession and every quote comes back above $200/mo for state minimum liability. The reason is almost certainly your credit score — and in most states, insurers are legally allowed to use it as one of the biggest rating factors, often outweighing your actual driving record. A driver with poor credit (typically below 580) pays an average of 114% more for car insurance than an identical driver with excellent credit, according to a 2023 rate analysis by The Zebra. That's not a typo: you can be paying double strictly because of credit history, even if you've never filed a claim or gotten a ticket. For state minimum liability coverage, that often means the difference between $80/mo and $170/mo. The penalty isn't equal across carriers. Some insurers increase rates by 60–80% for poor credit, while others impose a 150–200% surcharge. This variance is the single biggest opportunity for cost-conscious drivers: the cheapest carrier for someone with excellent credit is rarely the cheapest for someone with bad credit. You're not looking for who insures bad credit drivers — you're looking for who charges the smallest penalty. Four states — California, Hawaii, Massachusetts, and Michigan — ban or severely restrict the use of credit scores in auto insurance pricing. If you're in one of these states, credit is a non-issue and you can ignore the rest of this article. If you're anywhere else, credit is likely your largest rate factor after age and coverage level. collision and comprehensive coverage

National carriers vary wildly in how they treat credit. Geico and Progressive typically impose some of the steepest credit-based surcharges — often 120–180% increases for poor credit compared to excellent credit. State Farm and USAA (if you're eligible) tend to penalize credit less aggressively, with increases in the 60–100% range. But the real opportunity often lies with regional carriers and non-standard insurers. Non-standard carriers like The General, Safe Auto, and Acceptance Insurance are specifically designed for high-risk drivers, including those with poor credit. They don't penalize bad credit as heavily because their entire risk pool already has it. A driver paying $220/mo with Geico for state minimum liability might pay $140/mo with The General for identical coverage. The trade-off: non-standard carriers sometimes have slower claims service, fewer digital tools, and less flexible payment plans. The most reliable way to find the lowest rate is to get quotes from at least one national carrier, one regional carrier, and one non-standard carrier. Don't assume the biggest name will reject you or charge the most — credit scoring formulas vary, and Progressive might quote you $180/mo while State Farm quotes $115/mo for the same coverage based purely on how each weights your specific credit profile. If you're shopping for liability-only coverage on an older vehicle, your goal is simple: find the lowest monthly premium from a carrier licensed in your state. Brand reputation matters less when you're not filing claims. Focus entirely on price and payment flexibility.

Improving your credit score is the long-term solution, but if you need coverage this week and your score is 550, here are the immediate levers that actually work. First: increase your deductible if you're carrying collision or comprehensive coverage. A $1,000 deductible instead of $500 can cut your premium by 15–25%. If your car is worth less than $4,000, drop collision and comprehensive entirely and stick to state minimum liability — the coverage costs more than the potential payout. Second: ask about payment-in-full discounts. Paying six months upfront instead of monthly can save 5–10%, and it eliminates installment fees that add $5–10/mo to your bill. If you can't afford six months upfront, at least avoid carriers that charge installment fees above $7/mo. Third: bundle your auto policy with renters insurance. A renters policy costs $15–25/mo and often triggers a 5–15% auto discount, meaning you can add $20/mo in renters coverage and save $25/mo on auto. Fourth: reduce coverage to your state's minimum liability limits if you're currently carrying higher limits. Dropping from 100/300/100 to 25/50/25 (in a state where that's the minimum) can cut your premium by 30–40%. The trade-off is clear: you're personally liable for any damages above those limits, and 25/50/25 is exhausted quickly in a serious accident. But if the alternative is driving uninsured because you can't afford $180/mo, minimum coverage at $95/mo is the rational choice. Finally: ask about usage-based insurance programs like Snapshot (Progressive) or Drive Safe & Save (State Farm). These programs track your driving via an app or device and can offer discounts of 10–30% if you drive fewer miles, avoid hard braking, and don't drive late at night. They don't care about your credit score — only your actual behavior behind the wheel.

If you live in California, Hawaii, Massachusetts, or Michigan, credit scores either cannot be used at all or are severely restricted in pricing. California explicitly bans credit-based insurance scoring, meaning your rate is based on driving record, miles driven, and years of experience — not your credit history. Hawaii and Massachusetts impose similar restrictions. Michigan's 2020 auto insurance reform limits how much weight insurers can give to non-driving factors, including credit. In these four states, the advice in this article is irrelevant. Shop based on driving record, coverage level, and mileage — credit won't be a factor. Everywhere else, credit is fair game, and the penalty varies by state regulatory environment. Some states like Florida and Texas allow insurers wide latitude in credit-based pricing, while states like Maryland and Oregon have implemented some restrictions on how credit can be weighted. If you're moving between states, this matters. A driver with a 540 credit score moving from California to Texas could see their premium double overnight, even with an identical driving record and vehicle. Conversely, a move from Florida to California could cut a bad-credit driver's rate in half. When comparing quotes, always confirm whether the state you're shopping in restricts credit scoring — it changes which carriers will be cheapest.

Insurers don't use your FICO score directly — they use a credit-based insurance score, which is similar but weights factors differently. FICO scores range from 300–850; insurance scores use proprietary formulas from LexisNexis or TransUnion that emphasize payment history, credit utilization, and length of credit history. A bankruptcy, repossession, or multiple 90+ day late payments will hurt your insurance score more than your mortgage score. Most insurers tier drivers into excellent, good, fair, and poor credit bands. Poor credit typically means a score below 580–600, though the exact threshold varies by carrier. Fair credit runs roughly 600–670, good credit 670–740, and excellent above 740. The rate jump between tiers is not linear: the penalty for poor credit is much steeper than the discount for excellent credit. You don't need perfect credit to escape the worst pricing. Moving from a 540 score to a 620 score — achievable in 6–12 months by paying down a single collections account and making on-time payments — can shift you from the poor tier to the fair tier and cut your premium by 20–40%. You don't need to wait until you're at 750 to see savings. One often-missed factor: inquiries and new credit don't hurt insurance scores as much as they hurt FICO scores. Opening a secured credit card to rebuild credit won't spike your insurance rate the way it might temporarily ding your mortgage score. Focus on payment history and utilization — those are the variables that matter most to insurers.

If you've gotten three quotes and they're all above $160/mo for state minimum liability, it's time to add a non-standard carrier to your list. Non-standard doesn't mean uninsured or sketchy — it means a carrier that specializes in high-risk drivers and prices accordingly. The General, Safe Auto, Acceptance, and Dairyland are all legitimate, state-licensed insurers; they just serve a different risk pool than Geico or State Farm. The trade-off is usually claims experience and customer service. Non-standard carriers often have fewer local agents, slower claims processing, and less robust mobile apps. If you're carrying liability-only coverage and don't plan to file claims (because liability insurance doesn't cover your own vehicle), this trade-off is irrelevant. You're paying for legal compliance, not service quality. If you're in an accident and need to file a claim against the other driver's insurer, your own carrier's service quality doesn't matter — you're dealing with the at-fault driver's company. Non-standard carriers make the most sense for drivers who need the absolute lowest monthly payment and aren't concerned about filing their own claims. If you're carrying full coverage on a financed vehicle, it may be worth paying $20–30/mo more for a carrier with a stronger claims reputation.