Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate drivers about...

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Reviewed by Laura Walker
Licensed Agent for 10 Years

UPDATED: Mar 18, 2019

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No credit check car insurance is becoming popular especially in light of today’s economy. A few years ago car insurance companies noticed a correlation between credit scores and the risk of a policyholder filing a claim.

Since car insurance rates are based on the risk of people filing a future claim it was decided to include credit scores as part of the evaluation process and attach a higher risk premium to people with bad credit scores.

While this practice is banned in some states (such as California) most car insurance companies still apply this factor in qualifying applicants.

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How does a credit score logically relate to car insurance risk?

On the surface this argument seems like just another way for car insurance companies to charge additional premiums but when you really think about it there is some logic. People who have bad credit generally have less financial resources and access to credit than people with good credit.

In the event of a car accident those drivers with poor credit scores may elect to file a claim no matter how small simply due to the lack of ability to pay for any repairs.

When times were good do you remember not wanting to file a claim for a small amount since you were afraid your car insurance rates may go up?

Well, if you don’t have the money to fix the repairs what other option do you have other than file a claim? It’s not always about how large the claim but the sole act of just filing a claim that poses additional risk.

What is no credit check auto insurance?

No credit check auto insurance is a car insurance policy issued without checking the consumers credit scores. This type of auto insurance is offered by select companies who generally specialize in high risk drivers such as the Cure Car Insurance Company in New Jersey or The General Auto Insurance.

Although high risk insurers advertise no credit check auto insurance the primary business of this insurance provider is generally any type of high risk drivers and auto insurance premiums tend to be much higher than typical insurance premiums.

How much is no credit check car insurance?

Well, it’s certainly more expensive than typical auto insurance. Depending on your profile and provider no credit check car insurance can be up to 50% or higher than typical premiums but car insurance is mandatory so if you want to drive you need to have some form of insurance.

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How can I improve my credit score?

Credit reports are known to have many errors. Some reports have even estimated that over 30% of all credit reports have errors so if you need car insurance and are concerned about some credit issues always pull a copy of your report from the three credit bureaus (Experian, Equifax, and Transunion).

Dispute any negative information and try to improve your score as soon as you can. Most credit report disputes take about 30 days to complete so don’t wait until the last minute.

Many drivers can still qualify with typical auto insurance companies regardless of a few bad credit marks yet sometimes they just skip straight ahead to the high-risk car insurance companies after being denied by one or two providers.

There are many options for people with poor credit and choosing a high-risk car insurance company is not always your only option.

Try to compare at least a handful of providers before focusing on any kind of no credit check auto insurance policy.

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