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Which insurance companies don't use credit scores?

All major car insurance companies — including GEICO, Progressive and State Farm — do a credit check during the quoting process. In fact, credit is one of the major rating factors used by underwriters when determining car insurance rates. At present, only three states disallow the use of credit history in setting ratesCaliforniaHawaii and Massachusetts, though other states are considering banning the practice. 

The telematics insurance company Root Insurance has recently vowed to phase out the use of credit when setting rates. Root plans to be the first car insurance company to do so, though the use of credit as a rating factor seems to be in place as of 2022.

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Key takeaways
  • All major car insurance companies check credit (where applicable)
  • California, Hawaii and Massachusetts outlaw the use of credit scores in pricing
  • Telematics insurance can be a good option for drivers with poor credit
  • Getting a car insurance quote does not affect your credit score

Why do car insurance companies check credit?

Car insurance companies view your credit score as an informative rating factor. Historical data from the Federal Trade Commission shows drivers with poor credit file more claims than do drivers with excellent credit, and that these drivers' claims are more costly to an insurer.

Ultimately, the goal of underwriters is to minimize the risk to the insurer, which means that those seen as "high-risk" are often subject to higher premiums — or sometimes denied coverage entirely. Some companies place a higher emphasis on credit than others, meaning that quotes can vary widely from one insurer to another.

Some companies place a greater emphasis on credit than others, meaning that quotes can vary widely from one insurer to another.


How does credit affect car insurance premiums?

Those with good credit often pay far less for insurance than do those with a poor credit history. The difference in average auto insurance rates between the lowest level of credit and the highest is upward of $1,500 per year.

AVERAGE ANNUAL PREMIUMS BY CREDIT TIER
Credit Tier Avg. Annual Premium
Poor $3,147
Fair $2,071
Good $1,760
Very Good $1,627
Excellent $1,506
Updated: 08/16/22.

Dynamic auto insurance data methodology

Methodology: The auto insurance rates displayed above and throughout this page are dynamic, meaning the data will refresh when the most recent information is made available. Rates are based on a sample driver profile — a 30-year-old single male driver with a Honda Accord and full coverage. This profile was adjusted based on common pricing factors used by major car insurance companies, like age, coverage level, driving record and others.

No credit auto insurance guide


Those with no credit history still have options for finding affordable car insurance. Consult our guide to the best car insurance companies for drivers with limited credit histories to find out more.


What are the best options for no-credit-check car insurance?

In some cases, your credit won't be used to determine your insurance premium. If you live in CaliforniaHawaii or Massachusetts, your credit score isn't a rating factor. This is because these states' legislators feel that credit score evaluation may disadvantage low-income drivers. If you live in one of these states, you're in the clear. 

Outside of these states, few options exist for car insurance without a credit check, though you should still be able to find good coverage at a reasonable price by shopping around or considering a telematics program.

Telematics car insurance 

For drivers worried about credit checks, telematics and usage-based car insurance programs can be good options. These programs base your insurance rates primarily on your driving performance and frequency rather than demographics alone. Using an in-car device or a mobile app, a telematics device monitors your driving behaviors to create your premium.

In theory, usage-based insurance is great for safe drivers who might be paying more for car insurance because of non-driving-related factors — for instance, poor or low credit. While telematics is relatively new in the insurance industry, most popular companies have their own programs in addition to their standard pricing model.

Telematics can monitor the following:

  • Harsh braking
  • Rapid acceleration 
  • Mileage
  • Time of day driven 
  • Mobile device usage while driving

 

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Zebra tip: shop around for quotes


Getting quotes from many different companies is a good way to find better prices. All companies weigh credit and other factors differently, meaning that you could find better rates simply by shopping around and comparing multiple quotes. Better still, getting quotes has no impact on your credit.


How does credit score impact insurance: a state-by-state analysis

Depending on your state, a poor credit score can impact you differently while shopping for auto insurance. As mentioned above, California, Hawaii and Massachusetts currently ban insurers from using credit. Washington state temporarily banned the process in 2021, though the ban was overturned by the end of that year, forcing the state's insurance commissioner to look for a longer-term solution. 

While not outright banning the process, the states of Texas and Colorado have limits on how insurers can use these scores, or at least require the justification of their use from insurers according to Bloomberg

Find your state below and follow the link for more state-specific information.

AVERAGE AUTO INSURANCE PREMIUMS FOR POOR CREDIT
State Avg. Annual Premium
Alabama $3,102
Alaska $2,495
Arizona $3,232
Arkansas $3,977
California $1,932
Colorado $3,602
Connecticut $3,582
Delaware $3,610
Florida $4,840
Georgia $3,321
Hawaii $1,717
Idaho $2,015
Illinois $2,415
Indiana $2,113
Iowa $2,390
Kansas $3,061
Kentucky $4,693
Louisiana $5,270
Maine $2,122
Maryland $3,323
Massachusetts $2,227
Michigan $5,313
Minnesota $3,681
Mississippi $3,303
Missouri $3,102
Montana $2,884
Nebraska $3,483
Nevada $3,219
New Hampshire $2,390
New Jersey $3,806
New Mexico $2,524
New York $5,216
North Carolina $1,467
North Dakota $2,762
Ohio $2,081
Oklahoma $3,250
Oregon $2,525
Pennsylvania $2,955
Rhode Island $3,959
South Carolina $3,779
South Dakota $3,202
Tennessee $2,909
Texas $3,400
Utah $2,812
Vermont $2,117
Virginia $2,553
Washington $1,859
Washington, D.C. $3,749
West Virginia $3,052
Wisconsin $5,030
Wyoming $2,761
Updated: 08/16/22.
AVERAGE AUTO INSURANCE PREMIUMS FOR EXCELLENT CREDIT
State Avg. Annual Premium
Alabama $1,522
Alaska $1,691
Arizona $1,519
Arkansas $1,769
California $1,932
Colorado $1,815
Connecticut $1,575
Delaware $1,765
Florida $2,529
Georgia $1,714
Hawaii $1,348
Idaho $1,041
Illinois $1,293
Indiana $1,072
Iowa $1,143
Kansas $1,546
Kentucky $2,166
Louisiana $2,268
Maine $1,071
Maryland $1,711
Massachusetts $1,308
Michigan $1,688
Minnesota $1,424
Mississippi $1,570
Missouri $1,599
Montana $1,503
Nebraska $1,531
Nevada $1,984
New Hampshire $1,036
New Jersey $1,589
New Mexico $1,405
New York $1,737
North Carolina $1,077
North Dakota $1,287
Ohio $985
Oklahoma $1,695
Oregon $1,312
Pennsylvania $1,545
Rhode Island $1,937
South Carolina $1,663
South Dakota $1,332
Tennessee $1,277
Texas $1,636
Utah $1,322
Vermont $1,036
Virginia $1,250
Washington $1,808
Washington, D.C. $1,905
West Virginia $1,399
Wisconsin $1,145
Wyoming $1,299
Updated: 08/16/22.

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RECENT QUESTIONS

Is car insurance a hard or soft credit check?

Insurance companies thankfully run a soft credit check. There are companies that do not use credit as a rating factor (as we discuss in our related article), but they are hard to find.
Apr 28, 2018 Salt Lake City, UT

Does having car insurance build credit?

You are correct that, in the majority of states, credit has an impact on your overall rate. However, maintaining car insurance and paying your bill on time will not result in a significant impact on your credit score like making timely credit card payments.
Jul 17, 2016 St. Petersburg, FL

What does an insurability score of 813 mean?

We have an article that breaks down the insurance score. In short, a high insurability score means insurance companies should be very competitive in rates and you are an ideal — or "preferred" — customer.
Nov 25, 2019 Soperton, GA

Do I need to unfreeze my credit to get a quote?

You should be able to get preliminary rates with your credit frozen. However, in order to finalize your rates and run all of the reports (credit, claims history, violation history) many carriers will require your credit to be pulled.
Jul 22, 2022 Atlanta, GA

Ross Martin photo
Ross MartinManager, Content Quality

Ross joined The Zebra as a writer and researcher in 2019. As a licensed insurance agent, he specializes in writing insurance content to help shoppers make informed decisions.

Ross holds a master's degree from Royal Holloway, University of London and has a background in copywriting and education. As a former teacher, he applies his educational skills to explain insurance concepts in ways that consumers can understand.

Ross's work has been cited by The New York Times, AxiosInvestopedia, The Simple DollarThe BalanceCar and Driver and Fox Business. He has been quoted by CNET, I Drive Safely and Kin Insurance

About The Zebra

The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.

  • The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.

  • The Zebra’s insurance content is not subject to review or alteration by insurance companies or partners.

  • The Zebra’s editorial team operates independently of the company’s partnerships and commercialization interests, publishing unbiased information for consumer benefit.

  • The auto insurance rates published on The Zebra’s pages are based on a comprehensive analysis of car insurance pricing data, evaluating more than 83 million insurance rates from across the United States.