Can You Be An Insurance Agent With Bad Credit?

As an insurance agent, your credit score is an important aspect of your career. But what happens if your credit score is not up to par? In my experience, having bad credit will not stop you from earning your insurance license although it may give you some added steps to the process.

Licensed Insurance Agent With Bad Credit

Having bad credit as a licensed insurance agent can create challenges and obstacles, so it is important to understand its impact and how to overcome these challenges.

In this article, we will discuss the impact of bad credit on insurance agent licensing, the challenges you may face, strategies for managing and improving your credit, and alternatives for licensed insurance agents with bad credit.

Impact Of Bad Credit On Insurance Agent Licensing

As an insurance agent, I understand that having a bad credit score might negatively affect your licensing as an insurance agent. It is important to understand that a bad credit score can raise a number of challenges. 

Many states require background checks, including credit checks, as part of the licensing process. A low credit score can raise red flags and lead to additional scrutiny, making it harder to obtain a license. 

Some states have specific credit score requirements that must be met in order to be licensed. In addition to the initial licensing process, many states also require insurance agents to renew their licenses on a regular basis. 

This often includes credit checks as part of the renewal process. A poor credit score could result in a denied renewal, putting your career as an insurance agent in jeopardy.

Being a licensed insurance agent with bad credit can also make it harder to secure errors and omissions (E&O) insurance. E&O insurance is a type of liability insurance that protects insurance agents from claims of negligence or malpractice. Some insurance carriers that offer E&O insurance require insurance agents to disclose things like bankruptcy.

Another challenge of bad credit is that it can limit the options of insurance companies that you can work with as a licensed insurance agent. Many insurance companies conduct credit checks on their agents as part of their appointment process, and those with low credit scores may be denied appointment or offered subpar compensation.

Having bad credit as a licensed insurance agent can make it difficult to obtain and maintain a license, secure E&O insurance, and find suitable insurance companies to work with. 

Work with Us to Increase Insurance Sales

Let’s Talk

Are you an insurance agent who wants to build a sales pipeline that never runs dry? Look no further. Contact us and discover how we can help you take your sales to the next level!

Challenges Faced By Licensed Insurance Agents With Bad Credit

As an independent insurance professional, I understand that not all agents have good credit scores, so it is important to know what challenges to expect if you have bad credit as an insurance agent. 
There Are A Number Of Challenges You May Face, Such As:

  • Finding A Company Who Will Work With Agents With Bad Scores: Many insurance companies run background checks and credit checks on potential agents, and may be hesitant to work with someone who has a poor credit history.
  • Finding Clients: Some clients may be hesitant to work with an agent who has bad credit, as they may view it as a sign of financial instability. This can make it difficult for an agent to build a client base and grow their business.
  • Limitations Of Policies You Can Sell: Some insurance companies may only allow agents with good credit to sell certain types of policies, such as life insurance or annuities. 
  • Risk Of Losing Their License: Many states have regulations in place that prohibit individuals with bad credit from obtaining or renewing an insurance license. This can make it difficult for agents to continue working in the industry and make a living. 
  • Difficulty Securing Financing For Their Business: Banks and other lending institutions may be hesitant to loan money to someone with bad credit, making it hard for agents to fund their business operations.

Strategies For Managing And Improving Credit As A Licensed Insurance Agent

As an insurance broker, I understand that having bad credit occurs for many reasons, and even though it can have an impact on your career as an insurance agent, there are strategies you can use to manage and improve your credit. 

Based on my experience as an insurance professional, strategies I recommend for managing and improving your credit include: 

  • Understanding The Factors That Affect Your Score: The most common factors include payment history, credit utilization, length of credit history, and types of credit. 
  • Make Credit Card And Loan Payments On Time:  Late payments can significantly lower your credit score and take a long time to recover from. 
  • Keep Credit Card Balances Low And Avoid Maxing Out Credit Cards: This will help to lower your credit utilization ratio, which can have a positive impact on your credit score.
  • Maintain A Mix Of Different Types Of Credit: This can include credit cards, loans, and other types of credit. 

This will help show that you can handle different types of credit responsibly and can have a positive impact on your credit score.

  • Consider Credit Counseling Or Working With A Financial Advisor: They can help you develop a plan to manage your finances, pay off debt, and improve your credit score. 
  • Be Patient And Consistent: It’s not going to happen overnight, but by implementing these strategies and sticking to them, you can see improvement over time.

Alternatives For Licensed Insurance Agents With Bad Credit

The process of repairing your credit takes time, and unfortunately, insurance agents with bad credit might have difficulty finding employment or securing contracts with insurance companies. Fortunately, there are alternatives available for insurance agents with bad credit. These alternatives include: 

  • One option is to work as an independent contractor rather than an employee. This allows the agent to build their own client base and potentially negotiate their own commission rates. 
  • You can also work with a captive agency. These agencies are owned and operated by a single insurance company and may be more willing to work with agents who have bad credit. However, the agent will have a limited range of products to offer and may have less earning potential.
  • Insurance agents with bad credit can also work with a managing general agent (MGA). These organizations act as intermediaries between insurance agents and insurance companies, and may be more open to working with agents who have bad credit. 
  • An agent could consider finding a partner with good credit history to open a new agency with them . This would enable them to work together and overcome the challenge of bad credit.

It is important to note that while these alternatives provide a path forward for licensed insurance agents with bad credit, they may also have their own set of challenges and limitations. 

Frequently Asked Questions

Can you become an insurance agent if you have bad credit?

It is possible to become an insurance agent even if you have bad credit but some states may require a credit check during the licensing process. Check with your state’s licensing department to see what their specific rules are.

How does bad credit affect your chances of getting hired as an insurance agent?

A bad credit score may affect your chances of getting hired as an insurance agent because many companies use credit scores as part of their hiring process. But there are some insurance companies that may be more flexible or willing to overlook a low credit score if they believe you have the skills and potential to succeed in the industry.

Can you still succeed as an insurance agent with bad credit?

You can still be successful as an insurance agent with bad credit. Your credit score is just one factor that may impact your career, and there are many other qualities that can make you a successful agent, such as a strong work ethic, good communication skills, and a passion for helping people.


As an insurance professional, I understand the impact a bad credit score can have on your career as an insurance agent. A bad credit score raises challenges for agents such as having a difficult time finding liability insurance and employment. Its important to keep in mind that with a bad credit score, its important to follow the proper strategies to improve it, and to consider alternative options available. 

If you liked this blog check out our other insurance articles on: