Wireless Sensor Networks have been proposed for several location-dependent applications. For such systems, the cost and limitations of the hardware on sensing nodes prevent the use of range-based localization schemes that depend on absolute point to point distance estimates. Because coarse accuracy is sufficient for most sensor network applications, solutions in range-free localization are being pursued as a cost-effective alternative to more expensive range-based approaches. In this paper, we proposed a Coefficient Allocated DVHop (CA DV-Hop) algorithm which reduces node’s location error by awarding a credit value with respect to number of hops of each anchor to an unknown node. Simulation results have verified the high estimation accuracy with our approach which outperforms the classical DVHop.