If you want to save money on your car insurance, you may want to start by improving your credit score.
A credit-based insurance score is a tool that companies can use to predict how likely you are to file a claim and how much they'll charge for coverage. For example, drivers with poor credit are more likely to file claims than those with good credit, according to research by the Federal Trade Commission.
That's why raising your credit score can have a big impact on your car insurance price. Those with very poor credit scores (between 300 and 579) pay 273% more than those with exceptional credit scores (between 800 and 850), according to data from the insurance comparison site the Zebra.
However, even moving up just one range can make a big difference: The Zebra's data found that rising from the very poor range to having a fair credit score (between 580 and 669) would save you $1,744 per year, or about 66%.
Similarly, someone with a fair credit score who moves to a good credit score (670 to 739) could save up to $540 per year on car insurance.
Here's what you need to know about car insurance and your credit score.
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Car insurance and credit scores
How much does bad credit affect car insurance?
Your credit score will likely affect your car insurance rates in a big way.
Seven states — California, Hawaii, Maryland, Massachusetts, Michigan, Oregon and Utah — have laws prohibiting or restricting insurers from using credit-based insurance scores. In every other state, your credit history is fair game for setting prices, and even determining if you'll be offered a policy.
Here's how much you'd save if you moved up from one credit score range to another.
| Credit score category | Savings by percentage | Savings in dollars |
|---|---|---|
| From very poor (300 to 597) to fair (580 to 669) | 66.26% | $1,744 |
| From fair (580 to 669) to good (670 to 739) | 25.81% | $540 |
| From good (670 to 739) to very good (740 to 799) | 11.74% | $220 |
| From very good (740 to 799) to exceptional (800 to 850) | 11.95% | $200 |
Source: The Zebra's 2026 State of Auto Insurance Report
How to get car insurance with bad credit
While it may be more difficult or expensive, it's still possible to get car insurance while you work on raising your credit score.
Plenty of insurers, including Geico, First Acceptance and Dairyland, will work with those who have less than perfect credit histories. We previously highlighted these insurers in our coverage of the best car insurance companies for bad credit, since they offer several discount opportunities and relatively low rates for drivers in this situation compared to other insurers.
Geico Auto Insurance
Policy highlights
Geico offers 16 discounts and a variety of optional add-ons, such as emergency roadside assistance, rental car reimbursement and mechanical breakdown insurance.
Availability
Geico auto insurance is available in all 50 U.S. states and Washington, D.C.
Accident forgiveness
Accident forgiveness is automatic if you remain accident-free for five years. It can also be bought as an upgrade when you buy or renew your policy.
Terms apply.
Read our Geico auto insurance review.
First Acceptance Auto Insurance
Cost
The best way to estimate your costs is to request a quote
App available
No
Policy highlights
First Acceptance Insurance Company has been underwriting and servicing insurance policies for more than 50 years. Its policies are affordable and sold by agents.
Dairyland Auto Insurance
Cost
The best way to estimate your costs is to request a quote
App available
Yes
Policy highlights
Founded in 1953, Dairyland offers auto insurance in 38 states and specializes in high-risk drivers. Offerings include non-owner car insurance policies, coverage for motorcycles and off-road vehicles and limited Mexico coverage on all California policies.
To be sure, it's even more important to shop around when you have poor credit. Get quotes with the same coverage limits and deductibles from several companies and compare them to find the best price.
How to raise your credit score
Raising your credit score can also help you access lower interest rates on loans, credit cards and mortgages, as well as other insurance types like homeowners.
There are a few simple steps you can take to start raising your credit score.
- Set up automatic payments: If you're able to set up automatic payments to pay your bills on-time and in full, do so. Payment history accounts for the largest share of your credit score at about 35%.
- Lower your balances: Your credit utilization ratio compares your balances to your credit limit. Aim to bring your utilization below 30% to improve your credit score.
- Check your credit report for errors: Read your credit report and see if there's anything that you don't recognize. If a negative mark doesn't belong to you, dispute it with the credit bureau.
Car insurance and credit scores FAQs
Does car insurance affect your credit score?
Your car insurance won't affect your credit score. However, your credit score likely will affect the price you pay for car insurance.
Can bad credit make car insurance go up?
Yes, having bad credit can make your car insurance more expensive. You could pay less if you take steps to raise your credit score.
Does Geico use credit scores?
Almost every insurance company uses credit-based insurance scores in states where they're allowed.
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