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Car Insurance Rates by Credit Tier

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Mallory Profeta

By: Mallory Profeta

Edited by Jackie Cohen | Reviewed by licensed insurance agent, Amber Benka

Last Updated May 10, 2022

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Quick Facts

  • Drivers with excellent credit can expect to pay as much as $2,000 less annually for car insurance than drivers with poor credit.
  • The cheapest insurer we found for drivers with poor credit is Metromile, with average rates of $144 per month.
  • California, Hawaii, Massachusetts, Michigan, and Washington all ban insurers from using a driver’s credit score when underwriting policies and setting rates.

You probably know that your credit score can affect your ability to get a loan and the interest rate you’ll pay. But did you know that your credit history also impacts your car insurance rate?

The better your credit, the lower your car insurance costs.

If your credit score isn’t perfect, though, there’s no need to panic. Every driver can save on car insurance costs when they compare quotes from top companies using Insurify. Note that comparing car insurance quotes won’t hurt your credit score! Best part? It’s 100% free. Start comparing today.

Cheapest Car Insurance for Drivers with Poor Credit

Poor credit is a score that falls below 630. If your credit isn’t the greatest, it’s not the end of the world when it comes to car insurance. These companies offer the cheapest car insurance quotes for drivers with less-than-desirable credit scores.

Insurance CompanyCheapest Quotes with Poor Credit
Metromile$144
Farmers$153
TSC Direct$165
Mile Auto$175
Foremost Signature$173
Disclaimer: actual quotes may vary based on the policyholder's unique driver profile.

Cheapest Car Insurance for Drivers with Average Credit

Credit scores are in the average range between 630 and 689. The better your credit, the cheaper your car insurance.

Insurance CompanyCheapest Quotes with Average Credit
Metromile$116
Farmers$123
TSC Direct$133
Mile Auto$140
Foremost Signature$142
Disclaimer: actual quotes may vary based on the policyholder's unique driver profile.

Cheapest Car Insurance for Drivers with Good Credit

Good credit is generally considered to be a score between 690 and 719. Drivers with good credit enjoy some of the lowest car insurance rates available.

Insurance CompanyCheapest Rates for Good Credit
Metromile$99
Farmers$106
TSC Direct$114
Mile Auto$120
Foremost Signature$121
Disclaimer: actual quotes may vary based on the policyholder's unique driver profile.

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Cheapest Car Insurance for Drivers with Excellent Credit

A score above 720 is considered excellent. Drivers with these high credit scores can expect to find the lowest rates for car insurance.

Insurance CompanyCheapest Rates for Average Credit
Metromile$93
Farmers$99
TSC Direct$107
Mile Auto$113
Foremost Signature$114
Disclaimer: actual quotes may vary based on the policyholder's unique driver profile.

How does credit score affect car insurance quotes?

Does credit score affect car insurance rates?

Generally speaking, drivers with good credit will pay less for car insurance than drivers with poor credit. In fact, drivers with excellent credit can expect to pay as much as $2,000 less per year on insurance premiums than drivers with poor credit.

Your credit information helps determine your insurance score, a statistical tool used by auto insurance companies to predict the chances (and potential cost) of you filing a car insurance claim. In other words, your insurance score predicts potential insurance losses. Your insurance score, therefore, directly affects your insurance pricing.

Note that your credit-based insurance score is separate from your FICO or Vantage score, which lenders use to determine your credit risk. Your credit rating factors in differently depending on the company you use, and insurance companies don’t have a unified tier system for what qualifies as good, average, or poor credit.

How do I know what my credit score is?

It’s easy to check your credit score. The Federal Trade Commission suggests that you check your credit with the three major credit bureaus (Equifax, Experian, and TransUnion) each year to monitor your score (as well as inquiries about your score) and to prevent identity theft. If you see inaccuracies, you have the right to contest them and correct your credit history.

Do all insurance companies check your credit score?

Most insurers will check your credit score. Only five states—California, Hawaii, Massachusetts, Michigan, and Washington—prohibit the use of credit scores when insurers are determining your auto insurance rate.

Note that getting a car insurance quote will not hurt your credit score. This is because there are two types of credit checks—hard inquiries (which do impact your score) and soft inquiries (which don’t impact your score). When an insurance company looks into your credit, it’s considered a soft inquiry, as opposed to the hard inquiries by credit and lending companies.

Why Insurance Companies Do Credit Checks

Statistical data analyses, including a study by the Federal Trade Commission, show that credit-based insurance scores can accurately predict future insurance claims. Specifically, not only are policyholders with low credit scores more likely to file claims, but their claims tend to be more expensive. Because of this, companies use poor credit as a sign of risk, increasing rates.

Other factors that affect your monthly car insurance premium include your age and gender, type of car, driving record, claims history, the deductible you select, and even your marital status.

Discounts for Drivers with Good Credit

A good credit score shows insurers that you’re responsible and trustworthy. Because of this, some companies like Progressive and Nationwide offer good credit discounts. Be sure to ask your insurer if they offer a discount based on your credit rating.

Frequently Asked Questions

  • Virtually every insurance company will conduct a soft inquiry into your credit score unless you’re in one of the states that prohibits it. Drivers with excellent credit can expect to pay as much as $2,000 less per year in car insurance premiums than those with bad credit.

  • Unless you live in one of the states that forbid insurance companies from using credit scores to determine rates, it may be impossible to get a quote without a credit check. Some companies might use telematics to determine usage-based rates, but this isn’t common.

  • You can generally expect to pay higher premiums if you have a low credit score. When shopping for any insurance, you’ll find the best rate by shopping around with the Insurify price comparison tool. Be sure to maximize potential savings based on life changes. If your credit or driving record improves or if you move, get married, or turn 25, it’s time to look for a better deal.

  • With time and effort, you can improve your personal finances. Be sure to pay all your bills and credit card payments on time–this directly impacts your credit score. Pay down as much of your debt as you can, as quickly as you can; accounts in collection should be paid down first. Then, keep your credit utilization (the amount of your available credit that you’re using) low.

Cheap Car Insurance for Everyone, Regardless of Credit Score

Whether your credit score is high or low, you should always shop around and compare car insurance rates for car insurance (and all types of insurance!). The Insurify price comparison tool makes it quick and simple. Don’t forget to compare prices annually to save the most money!

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Methodology

The car insurance quotes displayed are based on an analysis of Insurify’s database of over 40 million quotes from 500 ZIP codes nationwide. To obtain representative rates, Insurify’s data science team performs frequent comprehensive analyses of the factors car insurance providers weigh to calculate rates including driver demographics, driving record, credit score, desired coverage level, and more.

Insurify’s analysis also incorporates the Insurify Composite Score (ICS) assigned to each insurance provider. The ICS is a proprietary rating that weighs multiple factors reflecting the quality, reliability, and health of an insurance company. Ratings used to calculate the ICS include Financial Strength Ratings from A.M. Best, Standard & Poor’s, Moody’s, and Fitch; J.D. Power ratings; Consumer Reports customer satisfaction surveys and customer complaints; mobile app reviews; and user-generated company reviews. 

With the above insights and ranking methods, Insurify is able to offer car insurance shoppers insight into how various insurance providers compare to one another in terms of both cost and quality. Note, actual quotes will vary based on unique attributes including the policyholder’s driver history and their garaging address.

Mallory Profeta
Mallory Profeta

Content Writer at Insurify

Mal Profeta is a writer, editor, educator, and public health advocate. They serve as the communications director of an NIH-funded clinical and translational science research center that focuses on addressing health disparities in Appalachia. A former Fulbright recipient, they are completing an MFA in poetry at New York University.

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