Your credit score can have a massive impact on how much you pay for car insurance. In 2026, drivers with bad credit are often paying hundreds or even thousands of dollars more per year than those with good credit — even with the exact same driving record and vehicle.
Here’s what you need to know.
How Much More Are You Paying with Bad Credit?
On average, drivers with poor credit can pay 40% to 100%+ more for the same coverage compared to drivers with excellent credit.
Real examples in 2026:
- Good credit driver: $1,800 – $2,400 per year
- Bad credit driver (same car, same record): $2,800 – $4,500+ per year
In high-cost states, the gap can be even larger.
Why Do Insurance Companies Use Credit Scores?
Insurance companies use credit-based insurance scores because data shows that people with lower credit scores tend to file more claims. They see credit as a risk indicator, similar to age or driving history.
Note: A few states (like California, Hawaii, and Massachusetts) ban or limit the use of credit in insurance pricing.
What Counts as “Bad Credit” for Insurance?
Most insurers look at credit-based insurance scores rather than the regular FICO score. Generally:
- Excellent: 750+
- Good: 700–749
- Fair: 650–699
- Poor/Bad: Below 650
How to Lower Your Rates Even with Bad Credit
- Shop around aggressively — Different companies weigh credit differently. Some are more forgiving than others.
- Improve your credit over time — Paying bills on time and reducing debt can lower your rates at renewal.
- Raise your deductible if you can afford it.
- Take a defensive driving course.
- Ask about usage-based insurance (telematics programs that track safe driving).
- Bundle policies (auto + renters or home).
- Choose a cheaper-to-insure vehicle.
The Bottom Line
Having bad credit can significantly increase your car insurance costs in 2026. While you can’t change your credit overnight, shopping around and making smart choices can still save you a lot of money.
Don’t just accept the high quote — compare multiple companies and look for insurers that are more flexible with credit.
If you’re also a new driver, check our guide on car insurance for first-time buyers in 2026. And see our article on car insurance rates by state in 2026 to understand how location plays a role.
How much more are you paying because of your credit score? Share your experience in the comments below.
