Car Insurance with No Credit Check Requirements

Getting car insurance without a credit check depends on where you live. In some states, it's illegal to use credit scores as a factor when determining how much you'll pay for car insurance.

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UPDATED: Sep 21, 2021

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Written By: Laura BerryReviewed By: Joel OhmanUPDATED: Sep 21, 2021Fact Checked

Here's what you need to know...

  • Poor credit reports imply irresponsibility and failure to make payments which insurance companies view as an additional risk and sometimes a reason to refuse to insure you
  • Insurance contracts with a no credit check provision are available to allow you to buy insurance without having to worry about your credit report
  • Most companies who offer a no credit check option have higher auto insurance costs as a way to protect themselves if you become a high-risk driver
  • Try to improve your credit score so you can find better deals on car insurance policies without any extra hassle

It may surprise you to know that not only does credit score limit your opportunities to lease a new car, but it may very well also determine your premium rate for car insurance.

If you’re looking for car insurance and no credit check requirements then enter your zip code right now and compare car insurance quotes now!

What if I have bad credit?

Insurance companies analyze credit scores and reports and make risk-based judgments on your policy. It may surprise you to know that all insurance agencies retain the right to raise the price of your insurance premiums or cancel the policy altogether if you have a poor credit history.

Poor credit could include reckless spending, civil judgments, and accounts in collection. The insurance company believes that individuals who manage money carefully in the home are also capable of driving at a safer pace than people who regularly accumulate debt.

It’s not fair to say good credit drivers are more responsible than poor credit drivers. However, statistics show that good credit drivers file fewer claims than those drivers with poor credit.

Some auto insurance companies also argue that poor credit drivers tend to exaggerate claims more often than good credit insured drivers and also commit more instances of insurance fraud.

Bear in mind that some insurance companies may use poor credit scores to deny you renewal coverage—even if you never file a claim and pay every bill on time! If your risk increases for any reason, the insurance company may not be able to afford you.

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How to find help when you need it?

Look into buying insurance contracts with a no credit check provision.

Remember that a good credit score is about 700 while a poor credit score is 600 or less. That doesn’t leave much room in between. It’s better for the issue to be avoided, rather than to suffer the consequences of a 650 or 600 credit score.

How do you go about finding a company that sells a policy not affected by credit rating?

If you do manage to find a company that cooperates in this regard, that company will want to know your risk level before they give you a firm price.

The only proper way to issue a contract for car insurance is to objectively consider all risk factors so they can accurately predict future claims.

What these companies can offer is the option to not run a credit check and to base your premiums on other factors such as:

No credit check car insurance companies are rare, because most insurance providers use the credit score in determining the monthly premium. However, there are ways to get non-credit based car insurance, but those policies could cost much more than a standard car insurance policy. Always compare the no-credit-check policy with a comparable standard policy.

Your insurance credit score is calculated based on information in your credit report, so before you start looking for car insurance companies that don’t check credit, analyze your credit score to see if there’s something to worry about.

If there is an auto insurance company in your state that offers this type of insurance for people with bad credit, it’s worth checking their rates and comparing them to other options.

What’s the final word?

Since a no credit check insurance company is doing you a favor and eliminating credit score from the equation, you can bet that the company does get some financial rewards out of the deal. They can raise their premiums slightly to a level less than if you applied with poor credit.

If you don’t want to pursue a company with these higher rates, then you will have to take the following steps to fix your credit rating:

  • You can request a free copy of your credit history courtesy of the Fair Credit Reporting Act.
  • You can examine the report for any mistakes and find out which debts are costing you a superior insurance policy.
  • Pay these debts off as soon as possible and watch your insurance rates likewise improve.

Obviously, there are some circumstances in which applying to a car insurance company with no credit check loan options would be ideal.

For example, if you are starting a new job and have no way to work beside your car — but no insurance company wants to cover you — then it may be a necessary debt to take on.

However, if you are in reasonably stable financial shape, then it’s a far better idea to focus on the real problem: debt and consolidation.

If you are in need of car insurance, try no credit check opportunities from local companies in your area. Be sure to compare the rate to several traditional insurance companies before making up your mind.

Remember, just because one company can afford to lose an auto insurance policy does not mean that every company in town has blacklisted you!

You can start searching for a cheaper policy right now. Enter in your ZIP code into our comparison tool car insurance quotes now!

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

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