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Can You Get Car Insurance with Bad Credit?

Getting car insurance with a poor credit score can be difficult, but it is possible. In the UK, insurance companies do not always look at credit history when deciding prices. Still, having bad credit can make it harder to pay for monthly payments on your policy.

Some insurance companies look at your credit before they set up monthly payments. A low credit score can make you seem like a higher risk. This means you might end up paying more for insurance. However, some insurers offer competitive rates for drivers with poor credit. They help you find affordable coverage even if your credit isn’t great.

Does Bad Credit Affect Car Insurance Costs?

In the UK, car insurance companies do not use credit history to set insurance rates like they do in some other places. However, having bad credit can still influence your car insurance. Here are several ways it can affect you:

  • When you pay each month, insurance companies will look at your credit score. A bad credit score can lead to higher interest rates or your payments being turned down.
  • If you miss a payment or are late, insurance companies may see you as a higher risk.
  • A past of financial issues, such as an Individual Voluntary Arrangement (IVA) or a County Court Judgement (CCJ), might cause some insurance companies to limit your available policy options.

A low credit rating doesn't always mean you will pay more in premiums. But, it can make it tough for you to find flexible payment choices.

Car Insurance Costs Based on Credit Score

Here is a simple look at how credit scores can affect car insurance costs:

Credit Rating Annual Premium (Paid in Full) Monthly Payments (With Interest)
Excellent (700+) £500 - £900 £50 - £80 per month
Good (600-699) £600 - £1,100 £60 - £95 per month
Fair (500-599) £750 - £1,300 £75 - £120 per month
Poor (Below 500) £900 - £1,500 £90 - £150 per month

These pricing estimates are derived from market research and publicly available data from UK insurers. Actual costs may vary based on individual circumstances and provider policies.

If you have poor credit, you may have to pay a bigger deposit for your monthly car insurance. You can also look for an insurer that does not perform a hard search.

Why Do Insurance Providers Check Credit Scores?

Most insurance companies in the UK do not check your credit history when they set your insurance premiums. However, they may perform a credit check on drivers who pay their insurance monthly.

Types of Credit Checks in Car Insurance

Type of Credit Check What It Means for You
Soft Search A preliminary check that does not impact your credit rating. Insurers may use this to give an estimated quote.
Hard Search A full credit check when you apply for monthly payments. It can affect your credit score if declined.

If your credit score is low, some insurance companies may reject your request for monthly payments. A good way to avoid this issue is to pay the full premium at one time.

Why Do Insurance Providers Check Credit Scores

Ways to Lower Car Insurance Costs with Bad Credit

  • Compare insurance policies from different companies to find the cheapest price.
  • Pick a car that belongs to a lower insurance group. This can help lower your insurance rates.
  • Pay by an annual lump sum instead of making monthly payments. This can help you avoid credit checks.
  • Raise your voluntary excess, but ensure you can afford it if you need to make a claim.
  • Consider telematics insurance. This kind of insurance uses your driving habits to set the premium instead of relying on your credit history.
  • Build a track record of safe driving. This can help you lower your premiums over time.

A car insurance comparison service can help you find the best way to get affordable car insurance. This is especially useful if you are having financial troubles.

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How to Improve Credit Scores for Better Insurance Rates

Improving your credit score can help you find better deals on insurance.

  • Look at your credit report regularly and correct any errors.
  • Make sure you do not pay your current bills late.
  • Reduce your credit use by keeping your account balances low.
  • Register on the electoral roll. This shows who you are.
  • Pay off any debts, such as loans and unpaid credit cards.

A higher credit score can help you find cheaper insurance policies and easier payment choices.

Best Car Insurance Options for Drivers with Bad Credit

If your credit score is not good, these car insurance options could be a good fit for you:

Insurance Type Best For
Telematics (Black Box) Insurance Drivers willing to be monitored for lower premiums.
Pay-As-You-Go Insurance Low-mileage drivers looking for affordable cover.
Non-Standard Car Insurance High-risk drivers who may struggle with mainstream providers.
Temporary Car Insurance Short-term policies for flexibility.

Using a car insurance comparison service can help you find the best insurance provider for your needs.

Compare Car Insurance for Bad Credit Drivers

Compare Car Insurance for Bad Credit Drivers

  • Get good rates from several insurance companies.
  • Find plans that suit your individual circumstances.
  • Avoid high monthly interest rates by picking upfront payment options.

Start comparing today. You can discover the best affordable car insurance policy that suits your needs.

FAQs About Car Insurance with Bad Credit

Some insurance companies look at your credit when you pay each month. But your credit score does not directly affect your insurance rates.

Specialist insurers provide insurance for people who have a poor credit score or an IVA.

Insurance companies may sometimes ask for a larger deposit when setting up monthly payments.

Looking at quotes and paying each year can help you save on rates.

Soft searches will not change your credit rating. However, hard searches can impact your credit rating.

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Page last updated on: 06/05/2025

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