If your credit has taken some hits, you already know it shows up in surprising places. Car insurance is one of the biggest. Two drivers with identical records can pay wildly different rates just because of their credit.
Car insurance for bad credit almost always costs more, but you are not stuck. Once you know why credit matters and which levers you can pull, you can trim the bill today and set up cheaper rates for tomorrow. Firstcard is a financial-comparison platform, not an insurer, so here is the honest picture.
Why Credit Affects Your Car Insurance
Most states let insurers use a credit-based insurance score when setting rates. It is not the same as your regular FICO score, but it draws on similar data. Insurers say drivers with lower scores tend to file more claims, so they charge more.
A few states restrict or ban this practice, including California, Hawaii, Massachusetts, and Michigan. Outside of those, your credit can move your premium a lot.
How Much More Does Bad Credit Cost?
The gap is real. As of July 2026, drivers with poor credit pay far more than drivers with strong credit for the same coverage. Reported figures vary by source, but the pattern is consistent:
- Drivers with bad credit pay roughly 95% more on average than those with good credit
- Full coverage for poor-credit drivers can run several hundred dollars more per month than for good-credit drivers
- Over a year, the difference can reach $1,500 to $4,500 depending on the insurer and state
The exact number depends on your location, your car, your driving record, and the company. That range is wide, which is actually good news, because it means shopping around pays off.
Rates swing so widely that it always pays to pull more than one number. Insurers like Lemonade let you get a quick online quote, so you can see where your credit lands you before you commit to anything.
Lemonade
Lemonade
Insurance that's fast, affordable, and actually feels good. Lemonade uses AI to process claims in seconds and donates leftover premiums to causes you care about. Get renters, home, pet, life, or car insurance — all from one app.
Standout feature
AI claims in seconds. Giveback program donates unused premiums. 2.9M+ customers.
Fees
Varies by policy (renters insurance from ~$5/mo)
Pros
Lightning-fast AI claims processing. Social impact through Giveback program. Beautiful, easy-to-use app (4.9★ App Store).
Cons
Limited home insurance availability (28 states + DC only).
How to Save on Car Insurance With Bad Credit
You cannot fix your score overnight, but you can lower your bill right now. Try these steps:
- Compare quotes from several insurers, since each weighs credit differently
- Ask about every discount, such as safe driver, bundling, and low mileage
- Raise your deductible if you have savings to cover it
- Drop optional coverage you no longer need on an older car
- Look into usage-based or pay-per-mile programs if you drive little
Because insurers price credit so differently, the single most powerful move is getting multiple quotes. The cheapest company for good credit is often not the cheapest for bad credit. A marketplace like Insurify can pull quotes from many carriers at once, which is especially useful when your credit swings the price so unevenly.
Insurify
Insurify
Finding the best insurance shouldn't feel overwhelming. Insurify compares personalized quotes from 120+ top-rated providers in minutes — so you can save up to 50% on auto, home, renters, and pet insurance without the hassle.
Standout feature
Compare 120+ insurance carriers instantly. Save up to 50% on premiums.
Fees
Free
Pros
Compares 120+ carriers in real-time. Save up to 50% on premiums. BBB A+ rated.
Cons
Some users report unwanted communications from third-party providers.
Rebuild Your Credit to Lower Rates Over Time
Here is the encouraging part. Since credit drives your premium, improving it can shrink your insurance bill at future renewals. This is one of the clearest ways that better credit puts money back in your pocket.
Credit-builder tools are designed for people starting over. The Self Visa® Credit Card pairs a secured card with a credit-builder account, so on-time payments can help you build history. The Kikoff Secured Credit Card is a low-cost way to add positive payment activity, and the Current Build Card reports everyday spending to help grow your credit.
The habits that raise your score are the same ones lenders and insurers reward: pay on time, keep balances low, and avoid new missed payments.
Track Your Progress
Rebuilding credit is easier when you can see it work. A monitoring tool like Creditship.ai lets you watch your score, catch errors on your report, and stay motivated between insurance renewals.
When your credit improves, get fresh quotes. Insurers do not always lower your rate automatically, so it pays to re-shop after a few months of progress.
The Bottom Line
Car insurance for bad credit costs more, but the price is not fixed forever. Shop hard today, stack every discount you qualify for, and rebuild your credit in the background so future renewals cost less.
No tool can promise a specific score change or a guaranteed lower premium, since insurers weigh many factors. Still, better credit tends to help across your whole financial life, and car insurance is a great example of why the effort is worth it.
Frequently Asked Questions
Can I get car insurance with bad credit?
Yes. You can get car insurance with bad credit in almost every state, though you will likely pay more than a driver with strong credit. Comparing quotes from several insurers is the best way to find a fair price.
How much more is car insurance with bad credit?
As of July 2026, drivers with poor credit pay roughly 95% more on average than those with good credit, and the yearly gap can reach $1,500 to $4,500. The exact amount depends on your state, car, driving record, and insurer.
Which states do not use credit for car insurance?
California, Hawaii, Massachusetts, and Michigan restrict or ban the use of credit in setting car insurance rates. In those states, your credit should not raise your premium, though other factors still apply.
Will improving my credit lower my car insurance?
It can, over time, in states that use credit-based insurance scores. As your credit improves, re-shop your policy, since insurers may not lower your rate automatically. Tools like the Self Visa Credit Card or Kikoff can help you build credit, though results vary.
