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Can I Get Car Insurance with Bad Credit?

young woman looking out her living room window with a smartphone on her hand

Job loss, unexpected medical expenses, and the overall high cost of living are only some of the life pressures that can keep you awake at night and could lead to a bad credit score. Your money problems might have already led to trouble buying a house or finding an apartment. Maybe you got turned down trying to buy a new car. You’re finding that bad credit is causing all kinds of problems in almost every aspect of your life.

It can also make it hard to buy car insurance. And when that happens, you might as well not even own a car. How do you get to work, shop for groceries, or drop off and pick up the kids from school? It’s a major problem – as if you don’t have enough of those already.

But you must have insurance to drive. The good news is that you can get car insurance even with bad credit. In fact, there is insurance for drivers considered to be a higher risk for several reasons. And that insurance coverage is much more affordable than you might think. Let’s take a closer look.

Why You Might Need Car Insurance with Bad Credit

There are all kinds of reasons a driver might become what an auto insurance company considers to be a higher risk. It might be because of a poor driving record, or because you’ve been driving without car insurance for a long time.

Your credit history is one reason you might fall into that high-risk category. Insurance companies may attribute a low credit score to irresponsibility. That’s not fair to everyone, but it’s how the system works. For that reason, a company might either raise the cost of coverage so high that you can’t afford it or not even offer you insurance in the first place.

Either way, you’re in trouble. No insurance means no legal way of driving. Let’s take a quick look at what your credit score is and how it affects you.

Does Bad Credit Affect Credit Scores?

Various companies exist mostly just to keep track of everyone’s money-spending history and translate it into what’s called a FICO credit score. These companies have names like Experian, Equifax, and TransUnion.

Just about every company that offers you some sort of credit, including credit card companies, housing providers, car dealers, and utility companies report your financial dealings with them to these companies.  With this information, you’ll get a FICO credit score. If you have ever been late making these payments or defaulted on a loan, those and other factors give you bad credit. For that, you may get a low credit score.

Can I Get Car Insurance with Bad Credit?

A worried young man looking at a policy because he lacks pandemic business interruption insurance.

It’s not impossible to get car insurance with bad credit, but it’s certainly more difficult. A poor credit score could boost the cost of your car insurance by more than $1,000 a year. 

That’s why it’s important to keep track of your credit score and to get copies of your credit report at least once a year. Read it over carefully and contact the FICO scoring companies if you see errors that make your credit history look worse than it is. Errors aren’t all that uncommon. 

Different insurers have different definitions of what’s considered poor credit. However, a FICO credit score of about 625 or lower would be called low by most insurance agencies. Low enough that the cost of an insurance policy could be out of reach.

Fortunately, there are agencies like Freeway Insurance that specialize in providing affordable coverage for all drivers. You can even get cheap insurance for bad credit

How to Find the Best Insurance for Bad Credit

Don’t despair if you have poor credit and you’re getting sky-high quotes for your car insurance. All that means is that you’ve got to work harder to find the coverage you can afford. You’ve got to go shopping. 

The key is to find an insurance agent you can trust. You should feel that you’re able to discuss your money challenges and explain how you need to find cheap auto insurance.

You might start by getting cost quotes for full coverage. But if the quotes you get for this category are still too expensive, start shopping for limited coverage.

The laws in every state are different when it comes to the minimum amount of auto insurance coverage you must have to drive. But your qualified insurance agent will know how the law applies in your state and will be able to direct you toward the lowest cost and highest quality auto insurance you can afford at this time.

Yes, Your Situation Will Improve

Although you have a low credit score now, the good news is that credit scores can and do improve. Your good financial decisions result in higher scores just like your bad decisions gave you bad scores. Just be patient and take small, smart steps at a time.

Here are several sensible tips for effectively improving your FICO credit score over time. 

Explore Your Insurance Options Today

You might have heard some bad news recently about your credit score and the high cost of your auto insurance. You might think you’ll have to sell your car and walk to work and everywhere else you need to go. But that’s not true.

Get a quote, visit us or call a Freeway Insurance agent today at (800) 777-5620. Let us help you find your best car insurance for bad credit. You’ll find it’s much easier than you thought to find the coverage you need.   

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