You need clear, practical information about how your credit affects auto premiums today. In most U.S. states, insurers use credit-based scores when setting rates, and that can raise the cost of full coverage by roughly 118% for drivers with low scores versus those with top scores.
That gap matters when you shop. Some states bar or limit credit in rating — like California, Massachusetts, and Oregon — which can change which companies give you the most value.
Start small: get quotes from widely available firms such as Geico, Nationwide, Amica, USAA (if eligible), and Erie. A soft credit inquiry will often be used and it won’t harm your score.
Key Takeaways
- Credit-based scoring can dramatically raise your car insurance rates; averages show big gaps for full and minimum coverage.
- Several states limit or ban credit in rating — check your state rules before you quote.
- Try Geico, Nationwide, Amica, USAA, and Erie first for competitive pricing and discounts.
- Soft inquiries are common and do not damage your credit score.
- Use telematics, discounts, and careful coverage choices to control costs while you improve your score.
What this buyer’s guide covers and how to use it today
Use this guide to turn confusing pricing and rules into clear action steps you can follow now.
This guide pulls current market data and practical steps to help you compare quotes fast. You’ll see how credit affects rates, current average costs, which companies to quote first, and simple tactics to lower your monthly cost.
Key actions to take immediately:
- Get 3–5 quotes with the same deductibles and coverage levels to compare apples to apples.
- Test telematics or pay-per-mile options if you drive less than average.
- Use the checklist below to line up liability limits, comp/collision deductibles, and uninsured motorist limits.
Who to quote first: Geico, Amica, Nationwide, USAA (if eligible), and Erie — each has distinct strengths you can test side by side.
Finally, checking quotes uses soft pulls and won't harm your credit. Requote after any positive change in driving, mileage, or score to capture lower rates.
How your credit influences auto insurance rates in the United States
Insurers often rely on specialized credit metrics to predict future claims, not the lending scores you use to borrow.
Credit-based insurance scores are built to forecast risk. They differ from FICO used for loans. In most states, insurance companies use these scores to set premiums. That means two drivers with the same record can pay very different amounts.
Credit-based score vs. traditional FICO
Firms use models that weight credit factors differently from lending scores. A common FICO insurance model assigns roughly 40% to payment history, 30% to current debt, 15% to credit length, 10% to new accounts, and 5% to credit mix.
State rules and where credit use is limited
Some states curb or ban the use credit in rating. These include California, Hawaii, Maryland, Massachusetts, Michigan, Nevada, Oregon, and Utah. If you live in one of those states, your choice of companies and savings strategies can shift.
Key weighting factors that matter most
Payment history and current debt drive most of your insurance score. Length of credit and new accounts also matter, while credit mix has the smallest effect. Soft credit pulls used for quotes do not hurt your score.
| Measure | Typical Weight | Impact on Pricing | Notes |
| Payment history | 40% | High | On-time payments reduce risk signals |
| Current debt / utilization | 30% | High | Lower utilization improves your insurance score |
| Length & new credit | 25% (15% + 10%) | Medium | Older accounts help; many new accounts can hurt |
| Credit mix | 5% | Low | Least influence on premiums |
"LexisNexis ranges roughly 200–997; 770+ is favorable and ≤500 is poor."
What car insurance costs with poor credit right now
Today’s pricing shows a wide gap between state minimums and full coverage for drivers with low scores.
Current nationwide averages put annual minimum liability near $1,396 for drivers with poor credit and full coverage around $3,624. That gap shows how much comprehensive and collision add to your cost.
Minimum vs. full coverage averages and typical premium gaps
Minimum policies keep your monthly bill low but leave you exposed after a crash. Full coverage raises the bill because it covers repair and replacement.
How much more you’ll pay on average with bad credit
MarketWatch and Bankrate data show drivers with low scores pay roughly 118% more for full coverage than those with excellent scores.
| Measure | Average (poor credit) | Notes |
| Minimum liability | $1,396 | Lowest required level; minimal protection |
| Full coverage | $3,624 | Includes comp & collision; higher premiums |
| Company samples | USAA ~$2,511; Nationwide ~$2,708; GEICO ~$2,748; Erie ~$2,492 | Rates vary by insurer and state |
Will quotes hurt your credit? Understanding soft inquiries
When you get quotes, most carriers use a soft pull. That does not affect your score.
- Shop 3–5 carriers to compare rates.
- Raise deductibles to lower premiums, if your emergency fund allows.
- Choose minimum only if your vehicle's value and risk profile justify it.
Best Car Insurance For Bad Credit: top picks to quote first
Quote selection matters: some companies routinely offset credit-related increases with deep discounts and tech programs. Start your shopping with carriers that match your needs and state availability.
Geico
Nationwide reach and simple online tools make Geico a fast first quote. You can access multi-vehicle and safe-driving discounts that help lower your auto insurance cost.
Amica
Amica stands out for claims satisfaction and discount stacking. If you bundle policies or qualify for dividends, the net premium can fall noticeably.
Nationwide
Nationwide offers SmartRide and SmartMiles. These telematics options reward safe or low-mile drivers, giving a clear path to lower premiums for many.
USAA
If you are military-eligible, USAA often posts among the lowest full-coverage totals for drivers poor credit. It pays to check membership options before you decide.
Erie
Where Erie writes business, Rate Lock and service focus can protect your renewals. Quote Erie if it’s available in your state to compare service-forward pricing.
- Compare quotes with the same limits and deductibles.
- Stack discounts—bundling, multi-vehicle, safety features—to cut your net rate.
- Check availability: not every company sells in every state, so run side-by-side quotes before you buy auto insurance.
When high-risk insurers and SR-22 options make sense
If standard companies turn you down, a different lane of insurers steps in to protect your driving record.
Dairyland and First Acceptance are two firms that specialize in writing high-risk drivers. You should consider them after multiple declines, a serious violation, or when you need an SR-22 to reinstate a license.
Dairyland and First Acceptance: coverage pathways
Dairyland writes in about 38 states and offers SR-22 filings, non-owner policies, and motorcycle or off-road coverage. It’s often competitive for at-fault accidents.
First Acceptance focuses on high-risk clients, issues SR-22 certificates quickly, and provides flexible payments. Expect higher rates and some limits on availability.
| Option | Availability | Key features |
| Dairyland | 38 states | SR-22 filing, non-owner, motorcycle/off-road |
| First Acceptance | Limited states | SR-22, flexible payments, higher complaints |
| Assigned-risk pool | State-specific | Last-resort access when multiple companies decline |
You’ll weigh tradeoffs: higher premiums and fewer discounts versus guaranteed access to essential coverage. Consider a non-owner policy if you need continuous liability while you rebuild.
"Drive violation-free, complete approved training, and requote every 6–12 months to exit the high-risk market."
State-by-state considerations that can change your best choice
Which insurers show up on your quote list depends largely on the state where you park your vehicle. Rules, footprints, and underwriting appetite vary across the United States, and those differences can change who offers the lowest car insurance for you.
Where credit use is limited or banned and what that means
Several states limit or prohibit insurers from using credit-based scores. These include CA, HI, MD, MA, MI, NV, OR, and UT.
Why that matters: if companies use credit less, carriers that relied on scores lose part of their edge. That can make regional companies and pricing models based on driving history or telematics more competitive.
Cheapest trends by state and why availability matters
Cheapest providers shift by state. GEICO often appears near the top in many states, while Travelers or local carriers lead in others.
Availability is critical. Nationwide doesn’t sell everywhere (AK, HI, LA, MA), Erie is regional, and USAA has military-only eligibility. If a national name is absent, you’ll pivot to a local company or regional insurer that offers comparable coverage and discounts.
- Re-quote after any move: a new state usually means different base rates and rating rules.
- Check eligibility and carrier footprint before spending time on quotes.
- Use state trends to set expectations, then verify with 3–5 quotes.
Build the right coverage when money is tight
When money is tight, your coverage choices must balance protection and monthly payments.
Start by checking your vehicle value and any lender or lease requirements.
State minimum liability vs. full coverage: how to choose
Minimum liability is the cheapest path, but it can leave you exposed after a loss. If your vehicle is older and has low market value, minimum may be reasonable.
If you owe a loan or lease, or you lack savings to cover repairs, full coverage (comprehensive and collision) often makes sense despite higher premiums. Raising deductibles is a fast way to lower your monthly payment while keeping the cover in place.
High-impact add-ons: uninsured motorist, accident forgiveness, and rental
Some add-ons give strong value. Uninsured/underinsured motorist protection is required in many states and can save you from large out-of-pocket bills.
Accident forgiveness from select carriers prevents a single at-fault crash from spiking renewal rates. Rental reimbursement and roadside assistance can be cost-effective if you lack emergency savings.
| Choice | When it helps | Cost trade-off |
| State minimum liability | Low-value vehicle, tight budget | Lowest premium; higher personal exposure |
| Full coverage | Loan/lease, newer car | Higher premium; protects repairs/replacement |
| Uninsured/Underinsured | High uninsured-driver rates in your area | Moderate added cost; protects you after others' faults |
| Accident forgiveness | Concern about future rate hikes | Small to moderate fee; prevents a single-incident spike |
- Pick liability limits above the minimum if you have assets to protect.
- Trim low-value extras and align payment dates with cash flow to avoid lapses.
- Requote after any change in vehicle value, driving, or credit to keep costs tight.
Proven ways to lower premiums even with bad credit
You can cut premiums with a few smart moves that stack up over time. Focus on actions you control: discounts, usage programs, and when you shop.
Stackable discounts that matter
Bundle policies like renters or homeowners to trim the base rate. Add multi-vehicle and safe-driver discounts where available.
Geico’s multi-vehicle can save up to 25% and its safe-driving offers up to 22%. Small safety features also qualify for reductions.
Usage-based telematics
Sign up for telematics if your driving is steady and cautious. Nationwide SmartRide and similar programs reward smooth braking and low-risk habits.
SmartRide can deliver roughly 40% in early-period savings for low-risk behavior.
Pay-per-mile and timing your switch
Pay-per-mile plans like SmartMiles cut costs if you drive well below average. They help remote workers and short-commute drivers save.
Time a switch before renewal or after a violation-free streak to avoid penalties. Always compare identical coverage terms across 3–5 companies to reveal real rate differences.
- Add paperless, autopay, or pay-in-full discounts if you can—these shave extra dollars from your bill.
- Re-shop every 6–12 months after positive changes in credit, mileage, or driving record.
Quotes, underwriting, and what insurers evaluate beyond credit
Underwriting looks beyond your score to the full picture of how you drive and where you park. Insurers combine many data points to set a quote. That explains why two identical credit profiles can still get different offers.
Key underwriting factors
- Driving history: MVR violations and at-fault accidents raise rates quickly.
- Claims history: frequent claims or large payouts flag higher risk.
- Garaging ZIP: theft and crash density in your ZIP affect regional pricing.
- Vehicle type and safety: repair cost, safety features, and vehicle symbol change premiums.
- Mileage: lower annual miles often lower your auto rate; report accurate figures.
Soft credit pulls are typical where permitted. Major companies—USAA, Geico, Erie, Progressive, Travelers, Nationwide—weight these factors differently. J.D. Power data also shows shopping and claims satisfaction vary by company.
"You’ll get the most accurate comparisons when you supply consistent drivers, VINs, annual miles, and prior coverage dates."
| Underwriting factor | Why it matters | How to improve |
| Driving record | Strong predictor of future claims | Complete defensive courses; avoid violations |
| Garaging ZIP | Reflects local theft/crash rates | Park in secured areas; consider theft deterrents |
| Vehicle & mileage | Repair cost and exposure | Choose safer trims; report lower miles accurately |
Payment flexibility without breaking your budget
Flexible payment choices can ease cash flow while you keep protection in force. Many carriers let you pick installment counts, due dates, and autopay to fit your pay schedule. That can prevent missed payments and avoid costly reinstatements.
Installments, due-date alignment, autopay, and pay-in-full discounts
You’ll weigh installment plans versus pay-in-full to balance monthly cash flow and total cost. Some insurers charge small billing fees for many installments. Others, like Geico and Nationwide, offer autopay or paperless discounts that lower your bill.
Align your due date with paydays to reduce late payments. Turn on autopay and paperless to collect small, stackable reductions on your premiums.
Avoiding lapses in coverage to prevent steep surcharges
Coverage lapses can force higher renewal rates, or push you toward high-risk placement and SR-22 filings. If you face a short-term gap, consider a non-owner or basic liability option instead of going uninsured.
"Set reminders to re-quote 3–4 weeks before your renewal so you can switch carriers without a lapse."
- Compare total cost: billing fees plus monthly payments vs. pay-in-full savings.
- Schedule due dates and enable autopay to protect your policy and record.
- Use short-term liability to bridge gaps and avoid surcharges that hit drivers poor the hardest.
Improve your credit to unlock lower auto insurance rates
A few focused habits—paying on time and lowering balances—move your insurance score more than chasing quick fixes. Insurers lean on models that weight your payment history and balances heavily, so steady improvement matters.
On-time payments and keeping utilization low
Payment history drives roughly 40% of the insurance score. Make every minimum payment on time to show consistent behavior.
Keep revolving utilization under 30%, and aim lower when possible. Paying down balances or requesting a responsible limit increase reduces utilization quickly.
Fixing report errors and monitoring all three bureaus
Pull reports from Experian, Equifax, and TransUnion. Dispute inaccuracies you find and set up alerts to catch new items before renewal.
Correcting errors can raise your score faster than waiting for on-time history alone.
Strategic moves: responsible limit increases and authorized-user status
Ask for limit increases only when you can keep balances low. That improves utilization without new accounts.
Becoming an authorized user on a seasoned, low-utilization account can lift your profile faster. Use this strategy selectively and verify the account's positive history first.
"You’ll re-shop your policy as your credit improves — quoting uses soft pulls and won’t harm your score."
| Action | Why it helps | Expected impact |
| On-time payments | Improves payment history | High — 40% weight on insurance score |
| Lower utilization | Reduces debt ratio | High — 30% weight |
| Dispute errors & monitor | Removes wrong negatives | Medium — faster score gains |
| Authorized-user strategy | Adds seasoned credit history | Medium — can boost short-term score |
Conclusion
Tie it together by choosing actions you can control—quotes, telematics, and on-time payments.
Start with side-by-side quotes from Geico, Amica, Nationwide, USAA (if eligible), and Erie where available. Track the nationwide averages—about $1,396 for minimum and $3,624 for full coverage—so you know what to expect.
Use discounts, consider pay-per-mile or usage programs if you drive little, and align payments to avoid lapses. Soft inquiries won’t hurt your score. Check whether your state limits credit use and adjust which companies you shop.
Work on on-time payments and lower utilization to improve your credit. Re-quote every 6–12 months or after positive changes to keep your rates low and your coverage right for your needs.
