Can You Get Car Insurance With No Credit Check?

Auto insurers may use your credit history to generate a credit-based insurance score meant to predict your risk of filing a claim. In most states, your credit score can affect your rates, though some state laws ban its use. But if you’re a driver with bad credit, you might pay more for car insurance.

However, no-credit-check insurance options can help you save. Keep reading to learn how to get coverage if you have bad credit or no credit history, which states allow credit checks, and which companies might be the cheapest.

Key Takeaways:

• Drivers with poor credit scores pay 164% more on average for auto insurance than drivers with excellent credit.
• GEICO, Westfield, SafeAuto, Erie, and Allstate are among the cheapest insurers for drivers with bad credit.
• Usage-based insurance, telematics, and temporary car insurance options may not require a credit check.

Car Insurance Coverage Types for Drivers With Bad Credit

Getting car insurance when you have bad credit can be expensive. Luckily, coverage options that typically don’t require a credit check are available. And if they do check your credit, the benefits you get from the program can outweigh the higher cost of bad credit car insurance.

Here are a couple of no-credit-check insurance coverages to consider.

Telematics

A poor credit score doesn’t mean you have a bad driving record. If you have no tickets or accidents and don’t mind giving up some privacy while driving, you could save with a telematics program.

Insurers use telematics to track your driving behavior — rewarding you for safe driving with significant savings. Some “pay-per-mile” plans just track your monthly mileage, while usage-based insurance programs monitor your overall driving habits (speed, braking, turning, etc.) to determine your rate.

You can save up to 40% on your car insurance with telematics programs, depending on certain driving factors and the insurance company you choose.

Some insurance company telematics programs include:

• Progressive Snapshot
• GEICO DriveEasy
• Liberty Mutual RightTrack
• Nationwide SmartRide

Pros:

• Potential for large savings
• Can reduce the risk of accidents and tickets
• Discounts available just for signing up

Cons:

• Savings might not be worth the constant monitoring
• Rates can increase with some companies
• Not a great fit for all drivers

Temporary car insurance

If you don’t drive a lot or don’t need continuous auto insurance coverage, temporary car insurance might be better for your budget. However, temporary coverage didn’t really exist until recently.

Hugo is a newer insurance company offering true temporary, short-term car insurance coverage, only when you need it.

Hugo’s Flex plan lets you turn coverage on and off, so you only pay for the days you need coverage. However, Hugo only offers liability coverage on its pay-per-day plan. So if you need full coverage – for example because your car is financed or leased and full coverage is required – Hugo may not be the best option.

Pros:

• Ability to pay for coverage only when you need it
• Affordable way to avoid coverage lapses
• Great for people who don’t need continuous coverage

Cons:

• Only available for liability-only policies through Hugo
• Can be more expensive than normal policies
• Must remember to turn on coverage each day you drive

States That Don’t Allow Credit Checks

Most states allow auto insurance companies to use your credit score to determine your rates. But a few states don’t allow credit-based insurance scores:

• California: Proposition 103 bans credit-based insurance scores entirely, citing that statistical correlations aren’t enough to determine your risk level.
• Hawaii: Insurers can’t use your credit score to determine your auto insurance premiums.
• Maryland: Allows companies to use your credit score to calculate your initial rates, but not to deny you coverage, cancel your policy, or increase your rates.
• Massachusetts: Insurers can’t use your credit score to determine your rates or cancel your policy.
• Michigan: Companies can’t use your credit score to determine your rate or to cancel, deny, or refuse to renew your policy.
• Oregon: Insurers can’t use your credit score as the sole reason to deny a new policy application or cancel an existing policy. They’re also limited in what credit history information they can use.
• Utah: Like Oregon, insurers can use your credit score to set rates and offer discounts. But they can’t use it to deny, renew, or cancel a policy or remove a discount.

Cheapest Car Insurance for Drivers with Bad Credit

Bad credit can sometimes mean paying high insurance premiums. However, knowing which car insurance companies typically offer the best prices for lower credit scores can make shopping easier.

The table below shows the cheapest insurers for drivers with poor credit scores, sorted by the cheapest liability-only rates.

GEICO is known for its low prices, and we found it offers the cheapest rates if you have bad credit. Westfield is the next cheapest option, averaging $24 more than GEICO’s $63 monthly rate. The remaining eight auto insurance companies have average rates substantially higher than GEICO.

Can You Get Car Insurance with No Credit History?

Your credit history is part of your credit-based insurance score. Payment history, credit usage, and the number of active accounts also factor into your credit-based insurance score.

So, even with no credit history, you can still get car insurance. With many different factors determining your premium and eligibility, it’s worth comparing companies offering no-credit-check auto insurance and those requiring a credit check, even if you have bad credit.

How Credit Score Impacts Car Insurance Rates

Your credit history can give insurance companies a sneak peek into your potential risk of filing a car insurance claim. People with a higher credit score typically manage their finances better and are less likely to file claims, according to the Insurance Information Institute.

The lower your risk of filing a claim and lapsing your insurance, the lower your premiums could be. The table below shows the average monthly rates for drivers based on credit tier.

With poor credit, your average monthly premium could be $179 more than with excellent credit, based on Compare.com data. You’d average $21 more per month with good credit than with excellent credit. The difference between fair and excellent is $33 per month, while the gap between fair and poor is $146.

How to get car insurance with bad credit

Take these steps to find the best deal on car insurance if you have a low credit score:

1. Consider your coverage needs. Only paying for the coverage you need can help keep your premiums low. If you have a car loan or lease, you might need full coverage — but state-minimum liability coverage may be enough if you have an older car.
2. Check for discounts and driver programs. Insurers offer lots of discounts, and you can stack most to maximize savings. Telematics programs and usage-based insurance could also lower your premium.
3. Compare car insurance rates. Getting multiple quotes from different companies to compare car insurance rates can help you find the lowest price for your credit score and coverage needs.

FAQs About Auto Insurance and Credit

Although no-credit-check insurance is possible, there might be more affordable options if you have bad credit or no credit. We answered the most common questions about credit and auto insurance below.

Why do insurance companies check your credit score?

Insurers consider your credit history, and use that information to generate a credit-based insurance score. Insurance companies base your rates on how risky you are to insure. Some insurance companies believe that drivers with lower credit scores are more likely to file claims that cost them money. That’s why drivers with bad credit tend to pay more for car insurance. On the other hand, they see drivers with good credit as less risky to insure, which leads to cheaper rates.

Does Compare.com use a soft or hard credit pull to check my credit?

Compare.com doesn’t pull your credit report to provide a car insurance quote. However, the insurance company you choose to purchase coverage from may use a “soft” credit check — which doesn’t affect your credit score — when you apply for a policy.

Does having car insurance build credit?

Car insurance doesn’t build credit since insurance companies don’t report to the major credit bureaus. However, using a credit card to pay your auto insurance premium and paying your credit card bill on time can help you build credit.

Can you get car insurance without a credit history?

You can get car insurance without having a credit history, though your premiums could be higher. Getting a policy with usage-based coverage or telematics can help you save if you have no credit or a bad credit score.

Methodology

Data scientists at Compare.com analyzed more than 50 million real-time auto insurance rates from more than 75 partner insurance providers in order to compile the quotes 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 quotes listed in this article have been gathered 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 drivers with insight into how auto insurance companies determine their premiums.

Sources:

1. Federal Trade Commission, “Credit-based Insurance Scores: Impacts on Consumers of Automobile Insurance,” Accessed August 11, 2023.
2. Insurance Information Institute, “Background on: Credit scoring,” Accessed August 11, 2023.
3. National Association of Insurance Commissioners, “Credit-based Insurance Scores,” Accessed August 10, 2023.