Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

Full Bio →

Written by

Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

Full Bio →

Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Sep 9, 2020

Advertiser Disclosure

It’s all about you. We want to help you make the right car insurance coverage choices.

Advertiser Disclosure: We strive to help you make confident insurance decisions. Car insurance comparison shopping should be easy. We partner with top car insurance companies. This doesn’t influence our content. Our opinions are our own.

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.

Key takeaways...

  • Better credit generally means better financial responsibility so in that view the use of credit scores by car insurance companies to determine your risk level may seem logical
  • Credit reports include everything from your loan history, credit limits, payment history, known addresses, aliases and more but the most important piece is your credit score
  • Your first stop should always be the most reliable companies since many of them still have affordable rates and you will certainly be able to count on them when the time comes to submit a claim

The use of credit scores in the car insurance industry has really upset a lot of consumers and rightfully so as being late on a payment certainly does not indicate what kind of driver you are.

However car insurance is about risk and car insurance company studies show those drivers with poor credit are more likely to submit a claim.

Better credit generally means better financial responsibility so in that view the use of credit scores by car insurance companies to determine your risk level may seem logical.

Remember, the risk factor is not just based on your driving skills. Use our FREE quote tool to compare auto insurance rates today!

Table of Contents

Understand the Credit Scoring System

Almost every consumer has a credit report but do you really know whats on yours? Credit reports include everything from your loan history, credit limits, payment history, known addresses, aliases and more but the most important piece is your credit score.

In fact, your credit score will often get you approved or denied for loans just by itself. These scores are the single most important factor on your credit report and can quickly put you in a higher risk category.

Credit scores are not perfect so even consumers who have always paid their bills on time might suddenly have a poor score due to some small situation with a credit account. You need to know your score before shopping for car insurance. As a general guide:

  • A great credit is a score over 740
  • Good credit is 680 or above
  • Fair Credit is 640-680
  • Poor credit is anything under 640

Credit scores are used by almost everyone – including employers – so watching and understanding your credit report is very important in order to avoid any surprises.

Compare Car Insurance Companies

Compare quotes from the top car insurance companies and save

 Secured with SHA-256 Encryption

Compare quotes from the top car insurance companies and save

 Secured with SHA-256 Encryption

No Credit Check Car Insurance Companies – Warning!

One of the most profitable business models is to offer financial services to people with bad credit.

Consumers with bad credit often feel like its impossible to get affordable rates and sometimes take the first product offered however shopping around for car insurance is critical when you have a poor credit score as rates vary widely from one provider to another.

When you search online using terms like “bad credit car insurance” or “no credit check auto insurance” be careful as many times these companies offer much higher rates than the major companies.

Your first stop should always be the most reliable companies since many of them still have affordable rates and you will certainly be able to count on them when time comes to submit a claim.

Poor credit may cost you more in auto insurance premiums but never sacrifice the service and coverage offered by well-known brands for a small unknown company just for a few dollars every month.

Remember, the real test of an auto insurance company is when you need to make a claim.

How to Get Your Credit Report

Equifax, TransUnion and Experian are the three credit reporting agencies and each offer a way to access your credit report online.

Also be careful here though since some do not provide online access without a subscription.

Consumers are entitled to a free annual report every year through annualcreditreport.com, however, your score is not included.

MyFico.com is probably the easiest place to read all your scores and the cost is around $50 for all three with scores.

Ready to get Car Insurance Rates Online

Car insurance comparison is more important than ever for people with credit issues so make sure to get multiple quotes.

Take your time, learn about car insurance, understand your credit score and then shop for the best affordable rates.