Which car insurance companies don’t use credit score when calculating rates?
UPDATED: Oct 1, 2012
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Asked October 1, 2012
Many car insurance companies use credit checks to give you a car insurance quote. This can cause the quote to be higher than normal. However there are some insurance companies who do not require credit checks. Some of the major companies such as Allstate and even Progressive are known for not using credit checks. Although they are always changing their policies and the way they do things right now they do not run a credit check on most of their drivers. A credit check can make your premiums much higher so it is important to use a no credit check insurance company to help save you some money. One important way to know if a company will run a credit check is if they ask for your social security number. Often companies will only ask for your social security number when they want to check into your financial background and see what your credit score is. Those with a higher credit score typically get a lower priced quote and those with bad or struggling credit often get a higher quoted price. For many people it is a good idea to get a copy of your credit score before applying for any auto insurance that way you know what you are working with.
Answered December 23, 2016 by RedTicker
Your credit score is one of the factors most insurance companies use to determine what your rates will be for most insurance policies, including car insurance. Maintaining a credit score of 650 or higher will earn you discounts on your insurance, with the largest discounts going to those with the best credit score. However, if you do not want your credit score to be used in setting your rates, there are some companies which do not use your credit score, as well as a way to avoid credit checks completely and still get the most reasonable rates available to you.
If you are paying installments on your car insurance, your credit score matters. Companies such as Allstate offer no credit score insurance policies, but the premiums are among the highest premiums offered to car owners. Because credit is such a large factor in insurance, any policy you buy without having your credit score checked will result in a higher cost. Typically, no credit check insurance is sold by high-risk insurers, and failure to have a credit check automatically puts you into one of the highest risk groups.
If you want to get cheap car insurance quotes without having your credit score involved, the trick is to avoid having payments on the policy. By paying the full policy premium at one time, the insurance company will skip your credit score check and give you a large discount for the lump-sum payment at the same time. For those with a low credit score, this option will allow you to have affordable coverage while working to bring your credit score back up to acceptable number.
Additionally, some states, such as California, do not allow insurance companies to use your credit score as a factor in your insurance cost. To find out whether your state allows the use of credit scores, call your state's Department of Insurance and ask them. That department can also refer you to high risk insurers if you are having trouble getting car insurance through traditional carriers.
Answered October 1, 2012 by Anonymous