The Best Car Insurance for People With Good Credit in 2024

The cost of auto insurance is partly tied to the credit score system. Simply put, buying car insurance with excellent credit is less expensive. Here, we’ll outline why that’s the case, how much you can save by having an excellent score, and steps you can take to add even more luster to your score.

Study after study has shown that drivers with high credit scores tend to make fewer auto insurance claims. The inverse is also true. Drivers with low credit scores tend to make more insurance claims. When it comes to insurance companies, it's all about risks. The lower the risk, the lower the auto insurance premium.

The price differential can be dramatic, depending on credit score. For example, a driver with bad credit will pay an average of 52% more for their auto insurance in Pennsylvania and Utah. They’ll pay an average of 58% more in New Jersey and Minnesota. In Kentucky, rates are hiked by an average of 57%, and in New York, it’s a whopping 62%.

There's often more a driver can do to reduce their insurance rates, even after their credit history has landed them a discounted insurance quote. Here are a few ways:

Compare rates

Even after finding an insurance rate that seems ideal, a driver should take time to compare car insurance rates with other car insurance companies. Here's why: The first quoted rate may not be the best in the market. It takes time to compare rates, but the savings may be worth the time.

Search for discounts

Most auto insurance companies offer a full menu of discount options. Here are some of the most common:

• Multi-car
• Early renewal
• Loyalty
• Good student
• Bundling
• Senior
• Military (even with companies other than USAA)
• Senior
• Low-mileage usage

There are so many car insurance discounts available, nearly any driver should be able to find one (or more).

Boost credit score

Let's say a driver's credit score is good but not quite excellent. Working to improve that credit score may push insurance rates down even more. In addition to helping to receive inexpensive car insurance, an excellent credit score increases a person's odds of scoring a low interest rate on a loan, qualifying for a house they want to rent, or landing their dream job.

Boosting a credit score comes down to regular, systematic practices, including:

Check credit report to look for inaccuracies: Any mistakes should be reported to the credit reporting agency. They have 30 to 45 days to investigate and remove any information that cannot be verified.

Always pay bills on time. Credit scores are broken down into five sections. Payment history makes up for the most significant piece of the pie at 35%. It’s important to pay utilities, house payments, credit card bills, and any other expenses on time, every time.

Control credit utilization. Credit utilization refers to the amount of money owed in relation to how much available credit a person has. Ideally, a person should keep their credit utilization under 30%, although the lower, the better. Say a person has $10,000 in available credit. Ideally, they wouldn’t use more than $3,000 of it at any given time.

Reduce debt. If a person carries so much debt that they worry about paying bills each month, don't have money left over after bills have been paid, or their credit utilization rate is too high, it's time to get control of those debts by paying them down.

We've only touched on the basics here. For more information, read: The Complete Guide to Your FICO® Score.

While it may be frustrating to pay more for auto insurance due to credit score, the good news is that it's not a permanent state. Any driver can work to improve their credit score. And for the driver with an excellent score, cheap auto insurance is one more reason to keep up the good work.