Jessica Sautter has a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Natasha McLachlan is a writer who currently lives in Southern California. She is an alumna of California College of the Arts, where she obtained her B.A. in Writing and Literature. Her current work revolves around auto insurance guides and informational articles. She truly enjoys helping others learn more about everyday, practical matters through her work.

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Reviewed by Natasha McLachlan
Content Writer

UPDATED: Apr 29, 2020

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In determining premiums, car insurance companies will consider your credit rating as one of the determining factors.

Your Credit Score Matters
Poor Credit? Don’t Worry!

There are two reasons why; starting with those who make monthly payments are less likely to make payments based on their poor credit history. The other reason may sound somewhat surprising, those with poor credit ratings are more likely to get involved in accidents.

While it may seem that accidents and credit ratings are two separate issues, insurance companies base their premiums on statistics. So, because the numbers say that it is more likely to happen, you will have to pay more if your credit rating is poor.

Aside from improving your credit rating, here are five simple ways to get non-credit based car insurance at affordable rates.

Lower Your Policy Requirements

In other words, choose the standard methods that result in lower premium payments such as the following;

  • Pay for the policy all at the beginning
  • Raise the deductible
  • Choose only the state minimum requirements
  • Bundle with other policies

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Select Insurance Companies that Do Not Consider Credit Ratings

There are insurance companies that do not consider credit ratings when setting premiums for their policies. You will need to do your research as they can vary from state to state, so start with your state’s insurance department to obtain a list of insurance companies that do not consider credit ratings.

It is true that in some states Allstate and Progressive do not factor in credit ratings, but that may not be true for all their insurance representatives.

Driving Record

Consider that there are other factors which mitigate your credit history, such as your driving record. A clean driving record over the past five years is valued by many insurance companies as being more valuable than your credit rating. You may want to check with your insurance company to see if they are still counting accidents or other incidents against you in their premium calculations that should be outdated.

Job History

Another factor that counters the effects of your credit rating is your job history. If you keep the same job for at least a year or two, that demonstrates stability which modifies the effect of your credit rating. This is because many people with poor credit ratings have difficulty maintaining the same job for a long period.

So, if you have been employed for more than a year at one company, that will lessen the effect of your credit rating.

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Clear Up Your Credit Rating

Keep in mind that your credit rating may include outdated or even false information. You should run a credit report check to see if there is any information that is incorrect or has past the limit for being counted. Any improvement may help lower the rates that you pay which in turn means more money in your pocket.

It’s not easy to get affordable car insurance with poor credit unless you live in a state that forbids such considerations or chose insurance companies that do not make the connection. However, there are ways that you can lower the rates so you can get the insurance coverage you need.