Finding affordable auto insurance is hard enough with good credit, but if you have bad credit, it may be even harder. In Iowa, you may pay up to 131% more for auto insurance if you have poor credit as opposed to exceptional.
Can I Get Auto Insurance if I Have Bad Credit?
Even if your credit score is poor, you can still find insurance. Your rates are typically going to be higher than usual, however.
Do I Have Bad Credit?
There are many sites available where you can plug in your information and check your credit score for free. Typically, 300-579 is considered very poor while exceptional credit is between 800-850. If you find yourself on the lower end, you may have trouble finding an insurance company that will sign you on to a policy. Things that influence your credit include unpaid bills or fines and your credit history. If you’re a new driver and haven’t built up credit yet, you don’t necessarily have bad credit. You simply have no credit and need to work to build it up. If you’re a new driver with no credit, your insurance rates will most likely be high as well. Check your credit score and discuss its effects on your policy with your insurance agent.
Does My Driving Record Affect My Credit?
Usually, your driving record won’t show up on your credit score or vice versa. A time where these may overlap is when you fail to pay a traffic fine and that fine is sent to collections. Things that show up on your driving record—which may also affect the cost of your auto insurance—include:
- Tickets: Tickets are likely to raise your auto insurance costs no matter the violation unless you can have them waived or deferred.
- DUIs/DWIs: DUIs and DWIs result in possibly one of the highest jumps in insurance rates.
- Accidents: You can avoid accidents by raising your insurance rates if your insurance agency has accident forgiveness. Speak with your insurance agency today about adding accident forgiveness to your policy.
- Other traffic violations: This includes parking violations, running red lights, reckless driving, etc. Speeding tickets may affect your insurance rates differently depending on how fast you were going. The faster you are caught driving over the speed limit the higher your insurance rate will typically rise.
Why Does Bad Credit Affect Car Insurance?
When reviewing drivers to offer a policy, insurance companies look for an understanding of how much risk the driver is. High-risk drivers are drivers that pose a huge risk due to a history of several tickets, traffic violations, etc. Credit scores can show the insurance company how responsible or reliable you are. If they notice that you often pay bills late or have racked up a lot of debt, the insurance company may charge you more to cover their possible losses.
What is the Cheapest Auto Insurance for Drivers with Bad Credit?
While insurance rates may be higher for drivers with bad credit, there are still ways to find affordable auto insurance. The following insurance companies have some of the cheapest quotes for drivers with bad credit between 350-629.
Understanding your credit score and driving record is just the beginning of finding auto insurance. Talk with a McCune and Reed Insurance agent today and find the right coverage at the right price, right down the street.