How to Get Car Insurance with Bad Credit

Insurance Services Tips 

Having bad credit can make it difficult to get approved for many things, including car insurance. Insurance companies use your credit score as a factor in determining your risk level, which can affect your premiums. However, having bad credit doesn't mean you can't get car insurance. Here are some tips to help you get car insurance with bad credit.

Shop Around

One of the best things you can do when trying to get car insurance with bad credit is to shop around. Different insurance companies have different underwriting standards, which means they may weigh credit scores differently. By shopping around, you can find an insurance company that is more lenient with credit scores and may offer you a better rate.

When shopping around, be sure to compare not only the premiums but also the coverage limits, deductibles, and any additional benefits or discounts offered by each company. You can use online comparison tools or work with an independent insurance agent who can help you find the best policy for your needs and budget.

Consider Non-Standard Insurance Companies

If you're having trouble getting approved for car insurance with bad credit, you may need to consider non-standard insurance companies. These companies specialize in providing insurance to high-risk drivers, including those with bad credit. While their rates may be higher than standard insurance companies, they may be your best option.

Non-standard insurance companies may also offer different types of coverage, such as liability-only or high-risk auto insurance, which can help you meet your state's minimum insurance requirements while keeping your premiums affordable. However, be sure to read the policy carefully and understand any exclusions or limitations that may apply.

Improve Your Credit Score

While it may not be an immediate solution, improving your credit score can help you get better car insurance rates in the future. By paying your bills on time, paying down debt, and disputing any errors on your credit report, you can improve your credit score over time. This will make you a lower risk to insurance companies and can help you get better rates.

To improve your credit score, start by reviewing your credit report from all three credit bureaus (Equifax, Experian, and TransUnion) and checking for any errors or inaccuracies. You can dispute any errors online or by mail, and the credit bureau must investigate and correct any errors within 30 days.

Next, focus on paying your bills on time and reducing your debt-to-income ratio. This means paying down credit card balances, avoiding new debt, and making sure you have a stable income source. Over time, these actions can help improve your credit score and make it easier to get approved for car insurance.

Ask About Discounts

Insurance companies offer a variety of discounts that can help lower your premiums. When shopping for car insurance, be sure to ask about any discounts you may be eligible for. Some common discounts include:

  • Multi-car discounts: If you insure more than one car with the same company, you may be eligible for a discount.
  • Safe driver discounts: If you have a clean driving record with no accidents or tickets, you may qualify for a safe driver discount.
  • Good student discounts: If you're a student with good grades, you may be eligible for a discount.
  • Bundling discounts: If you have other insurance policies with the same company, such as home or renters insurance, you may be eligible for a bundling discount.

Be sure to ask about any other discounts that may be available, such as loyalty discounts or discounts for completing a defensive driving course.

Consider Increasing Your Deductible

If you're having trouble affording car insurance with bad credit, you may want to consider increasing your deductible. Your deductible is the amount you pay out of pocket before your insurance kicks in. By increasing your deductible, you can lower your monthly premiums. However, be sure to choose a deductible you can afford to pay if you do get into an accident.

For example, if your current deductible is $500 and you increase it to $1,000, you may be able to save 10-20% on your premiums. However, if you get into an accident and have to pay the $1,000 deductible, you'll need to have that money available to cover the cost of repairs.

Be Honest About Your Driving Record

When applying for car insurance, it's important to be honest about your driving record. Insurance companies will check your driving record to determine your risk level, and lying about your record can result in higher premiums or even a denial of coverage. If you have a poor driving record, be upfront about it and ask the insurance company what your options are.

If you have a history of accidents or traffic violations, you may need to consider high-risk auto insurance or other types of coverage that are designed for drivers with a poor driving record. These policies may be more expensive than standard auto insurance, but they can provide the coverage you need to stay legal and protected on the road.

Consider Pay-Per-Mile Insurance

If you don't drive very often, pay-per-mile insurance may be a good option for you. With this type of insurance, you only pay for the miles you drive, which can result in lower premiums. However, be sure to read the fine print and understand how the insurance works before signing up.

Pay-per-mile insurance may be a good fit if you drive less than 10,000 miles per year or use your car primarily for commuting or errands. You'll typically pay a base rate plus a per-mile rate, which can vary depending on your driving habits and location. Some pay-per-mile insurance companies also offer discounts for safe driving or low-mileage usage.


Getting car insurance with bad credit may be challenging, but it's not impossible. By shopping around, considering non-standard insurance companies, improving your credit score, asking about discounts, increasing your deductible, being honest about your driving record, and considering pay-per-mile insurance, you can find an insurance policy that works for you. Remember to read the fine print and understand what you're getting before signing up for any insurance policy. With the right coverage, you can stay protected on the road and avoid costly accidents or legal issues.