Best Car Insurance for Bad Credit Drivers (2026)

Your driving record isn't the only thing insurers look at. In most states, your credit score can swing your premium by hundreds — sometimes thousands — of dollars a year. Here's how to pay less if your credit isn't perfect.

How much does bad credit raise your rate?

Insurers use a credit-based insurance score (different from your lending FICO score) to predict claim likelihood. The impact is significant:

| Credit tier | Average annual rate (full coverage) | |---|---| | Excellent (800+) | ~$1,550 | | Good (700–799) | ~$1,800 | | Fair (600–699) | ~$2,300 | | Poor (under 600) | ~$2,650 |

A poor-credit driver can pay $1,000+ more per year than an excellent-credit driver with the exact same record and car.

Cheapest car insurers for bad credit

No single company is cheapest for everyone, but these consistently rank well for poor-credit drivers nationally:

• GEICO — competitive base rates that soften the credit penalty
• State Farm — strong for drivers rebuilding credit
• Nationwide — frequently cheapest in the fair/poor tiers
• American Family and Progressive — worth quoting in many states

Because credit weighting varies by company and state, the only reliable way to find your cheapest option is to compare several quotes side by side.

States that ignore your credit

If you live in California, Hawaii, Massachusetts, or Michigan, insurers can't use credit to set your premium at all — your record, mileage, and location matter instead.

How to lower your rate with bad credit

1. Compare 5+ quotes — the single biggest lever, since each insurer weights credit differently.
2. Improve your credit — even moving from "poor" to "fair" can cut your premium noticeably at renewal.
3. Raise your deductible and ask about every discount you qualify for.
4. Take a usage-based/telematics program if you're a safe driver.
5. Re-read our full guide on how to lower your car insurance.

Frequently Asked Questions

Why does bad credit raise car insurance rates? Insurers in most states use a credit-based insurance score because data shows a correlation between lower credit and more frequent claims. Drivers with poor credit can pay 70% or more than drivers with excellent credit for the same coverage.

Which car insurance is cheapest for bad credit? It varies by state, but GEICO, State Farm, and Nationwide consistently rank among the cheapest for drivers with poor credit. The only way to know your best price is to compare several quotes.

Which states ban credit-based car insurance pricing? California, Hawaii, Massachusetts, and Michigan prohibit or heavily restrict the use of credit in setting car insurance rates. If you live there, your credit score won't affect your premium.

Sources: Insurance Information Institute (III.org), Federal Trade Commission (FTC) report on credit-based insurance scores.