Do You Need A Credit Score To Get Car Insurance?

Banks Editorial Team · November 5, 2018

New drivers may wonder if they need a credit score to get car insurance. While having no credit score history does not prevent us from getting car insurance, it can mean a higher premium. Insurance companies like to know what kind of a risk we are and need our credit history as one of those determining factors. With our credit history, they also would be able to predict how often we are likely to file a claim. In general, a higher credit score means cheaper instance rates. However, if the credit score is below 650, car insurance premiums start to climb. You do not need a credit score to get car insurance if you don’t mind paying as much as 67% more for that car insurance. Check your credit score before pricing out your next car insurance policy:



How Your Credit Score Impacts Your Car Insurance

Do we need that credit score to get car insurance? The straight answer is no we do not need a credit score to get car insurance. On the other hand, having insurance without a credit score incurs a higher premium. Below are some points to help make that decision.

The choice is ours as to whether we would like to use our credit score to get car insurance or not. Some car insurance companies are happy to give us car insurance without a credit score. A car Insurance premium payable, without the credit score, is much higher.

Over 90% of the car Insurers in the United States use your credit score to determine your premium. The client’s credit history is one of the meaningful variables to try and identify high-risk individuals. Car insurers do a statistical analysis to see if we are likely to file a claim based on our credit score. The credit history tells the insurers if you are likely to be a late payer, have outstanding accounts and whether your accounts are in good standing. This all helps to determine what type of premium we would pay. Having a credit score to get car insurance, if it is below the score of 650, could at the same time push up your premium. However, without the credit score, you could pay as much as 67% more for car insurance.

In the state of Massachusetts, California, and Hawaii, the use of credit scoring is not allowed to help determine your rate. So, in those states, you do not need a credit score to get car insurance.

Go to and determine what type of car insurance is available with and without a credit score.



Good Credit and Car Insurance

The benefits of a good credit score to get car insurance are; the higher your credit score the better the rate you will get. A negative mark, such as a late payment, lowers your rating. A low credit score implies financial stress, which could put you into a high-risk category because your behavior could be affected by this higher risk. A good credit score to get car insurance can often be as important to insurers as your driving record. A good credit score could also save you as much as 54% of your premium when you get it from an insurer like Farmers Insurance.

We hope that this information will also help you to determine whether to use your credit score to get car insurance.

Regularly check your credit reports especially at the three major credit report agencies, Equifax®, Experian®, and TransUnion®. Especially do this before you buy car insurance to determine what type of premium should be offered to you.



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