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Having a low credit score can impact your life in several ways and your car insurance premium could be affected too. Many people assume your credit won’t matter when taking out car finance as it does not involve borrowing money. However, this isn’t true. It can be more expensive to take out a bad credit car insurance deal as you could be seen as more of a risk to the lender and could stop you from getting the best deal.

Do car insurance providers check your credit? 

Yes! As part of the application process, many car insurance providers will run a credit check on you. There are many reasons why a car insurance company may want to see how you’ve handled your credit in the past. Your credit report can be used to price who you say you are and helps to avoid any fraudulent applications. If you wish to split your car insurance into monthly instalments, the provider will also need to perform a credit check to see how likely you are to pay your insurance back. It can be harder to obtain car insurance for bad credit if you’ve missed payments before. 

checking credit file

Is bad credit car insurance more expensive? 

Having a low credit score could make your car finance premium more expensive. People with bad credit are viewed negatively by providers as they are more likely to be at higher risk and more likely to make a claim. If a low credit score is due to missed or late repayments and you want to pay your insurance monthly, it can be harder to get accepted. Based on your previous history of borrowing, providers will make assumptions about how you’ll handle future finance and mishandling credit can put insurance companies off.

How is car insurance calculated? 

  • Age.
  • Occupation.
  • Driving Experience.
  • Previous Claims.
  • Type of Car.
  • Excess.
  • Type of Cover.
  • Credit Score.


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How to get cheaper bad credit car insurance?

The easiest way to get a better car insurance deal is to rebuild a low credit score. It can take time and effort, but for many the benefits are a no-brainer. Improving a poor credit score is all about making new financial habits, keeping on top of your current payments and proving to future lenders you can be trusted to handle your credit responsibly. 

To make your next car insurance deal cheaper, you could also consider the following. 

  • Choosing a cheaper vehicle.
  • Paying annually.
  • Limiting your mileage.
  • Increase the voluntary excess.
  • Telematics insurance (black box insurance). 
  • Avoiding penalty points. 

How to check your credit score for yourself? 

We recommend getting into the habit of checking your credit score every month and getting to know the information which is recorded on your credit file. You can check your credit for free using one of the UK’s credit referencing agencies such as Experian or TransUnion.

When you check your credit file, you will find out where you fall on the credit scale and the factors affecting your score. You should ensure all your information is accurate and up to date as misinformation on your credit report can negatively impact your score. If you need to fix anything, you can contact the credit agency that provided your report to dispute it.