Can You Refinance A Car Loan With Bad Credit?

Looking to refinance? Car loan payments can easily overwhelm your monthly budget, and as we head into the new year you may be looking to give your finances a tune-up. But what if your credit score is less than ideal? Is refinancing your car loan even an option? At Auto Approve, we’re here to help and answer all of your questions about refinancing with bad credit and help you get the best refinance rates possible.

What's Considered A Good or Bad Credit Score?

What do we mean by “bad credit”, and how important is it in terms of refinance? Car, SUV, and truck refinance are more beneficial when you have an increased credit score. Before we dive into refinancing, let’s look at how credit scores are calculated and what is considered a good or bad credit score.

Your Credit Score

Credit scores are used by lenders to determine how likely a person is to pay back their debts.

These scores are calculated based on five metrics:

Payment History (Your history of on-time, full payments)
Amounts Owed (The amount of money you owe vs how much credit you have available to you)
Credit History Length (The age of your credit accounts)
Credit Mix (The diversity or assortment of your debts)
New Credit (The number of new accounts you have opened plus the amount of hard inquiries you have)

All of these metrics are important to your credit score, but your payment history and your amounts owed weigh the heaviest and matter the most to your credit score.

What’s Considered a Bad Credit Score

Credit scores range from 350 to 850 and fall in the following brackets:

800 to 850: Excellent credit
740 to 799: Very good credit
670 to 739: Good credit
580 to 669: Fair credit
300 to 579: Poor credit

If you have fair credit or poor credit, you are considered to be less desirable (this is considered “bad credit”). People with the highest credit scores (740 and above, typically) will more easily be approved for loans and credit applications, and will typically get the best interest rates and APRs.

Why Is a Good Credit Score Important

Having a good credit score is vital for a number of reasons. Having a good credit score shows lenders that you are reliable and pay back your debts in a timely manner. A good credit score will give you:

Lower interest rates on credit cards and loans
Better chance for credit card and loan approval
Higher credit limits
Better insurance rates
Easier approval for rentals
More negotiating power for loans and accounts

Working to secure a good credit score will pay off a lot in the long run, especially when it comes to refinance. Car, SUV, and truck refinancing can be incredibly beneficial if your credit score has increased.

How Refinancing Can Affect Your Credit Score

When you refinance your car, it will affect two of your credit categories: Credit History Length and New Credit. Since you are closing one account (the old loan which you are paying off) and opening a new one, it will reduce the score of your credit history. But credit history only makes up for 15% of your score and as the account ages, this number will improve.

Your New Credit will also take a hit, from the new account you are opening plus the hard inquiries that are made on your credit. Be sure to apply to all of your lenders within a fourteen day period–this is the grace period that credit bureaus allow for inquiries. This means that all inquiries within that timeframe will count as one hard inquiry against your credit. Hard inquiries only stay on your credit report for a year, so it is only a temporary ding. New Credit only accounts for 10% of your credit score, so it is not a major component.

Is it Possible to Refinance a Car Loan When You Have Bad Credit?

While it always depends on your specific situation, it may be possible to refinance car loans if your credit is less than stellar. That said, it may make more sense to try to improve your credit before looking to refinance. If you are considering car refinance, think about what your goal is and how you can best achieve it.

Is the goal of refinancing to make lower monthly payments? Is it to save money overall with a lower APR? Do you need to add or remove a co-borrower? If your credit has not improved since your initial loan, you may not be eligible for a lower APR. But if your ultimate goal is to reduce your monthly payments, changing the terms of your financing might still be an option.

By extending the length of your loan, you will stretch out the payments over a longer period of time, therefore reducing your monthly payments.

If your goal is to add or remove a co-borrower, you will need to refinance. You cannot make big changes like that to your loan, so it is necessary to refinance your car loan. Adding a co-borrower with good credit may qualify you for a better rate when you do refinance.

The reality is, most lenders won't refinance with someone who has truly bad credit, so it's usually best to work on your personal finances and get your credit score up before applying. At Auto Approve, we can't offer many services for those with bad credit, but if you're on the fence and want to know if you'd be eligible for a better rate, you can always get a quote to find out. Getting a quote is free and doesn't require a credit check.

How Do You Improve Your Credit to Refinance?

In most cases, it will make sense to work on improving your credit before refinancing. Car refinance companies will be able to offer you better rates if your credit score has increased since your initial financing. As we mentioned before, people with the highest credit scores will more easily be approved for loans and credit applications, and will typically get the best interest rates and APRs. If you are interested in improving your credit score, try some of our tips below.

Check Your Credit Report

When was the last time you checked your credit report? You should aim to check your credit report three times per year. You are allowed to check for free once a year at each of the three major credit reporting agencies, Equifax, Experian, and TransUnion. Be sure to take advantage of this and stay on top of your credit.

When you get your report, review it thoroughly for errors or mistakes. There could be incorrect missed payments or other discrepancies that may be unfairly dragging down your credit. If you notice an error, report it immediately. The agencies have 30 days to look into your claim, so give yourself some time.

Finding and correcting errors in your credit report may instantly improve your credit score.

Work on Making Consistent Payments

The most influential and important part of your credit score is your payment history. Your payment history makes up 35% of your credit score. Do you always make your payments on time, or do they tend to be late? Are your payments full, or do they come up a bit short every now and then? Commit to being consistent with your payments and your score will increase. Cut back on eating out or think about canceling some unnecessary subscriptions to free up some room in your monthly budget. Six to eight months of consistency is usually enough to make a noticeable difference.

Pay Down Existing Debt

Another key factor of your credit score is your amount owed, which makes up 30% of your credit score. This is also referred to as your credit utilization ratio (the amount of money you owe in relation to how much credit you have available to you). Try to pay a little extra every month (or a lot extra, if you are able). This extra money will go towards your principal and save you a good amount on interest payments. If you are able to pay this debt down through budgeting, it can greatly help your credit score.

Avoid Opening New Lines of Credit

Resist any offers to open a new store credit card or another account. While these new credit lines don’t make huge impacts on your score, they can drag you down by ten or twenty points. That could be the difference between a good APR and a great APR.

What To Do When Your Credit Has Improved

Once your credit score has improved, you will have a much better chance of securing better terms for your refinance. Contact multiple credit unions, traditional banks, and online lenders to start getting quotes and rates. You should aim to apply to 3-5 lenders to get some competitive rates. You can also look into car refinance companies that specialize in auto refinancing. The key to getting a good rate is shopping around.

Be sure to apply to all of your lenders in the same fourteen day window. This will ensure that all of your hard inquiries will count as one hit on your credit report. At Auto Approve, we take care of this legwork for you. We know which lenders to reach out to and can handle the tedious paperwork so you don’t have to.

While it may be possible to refinance a car with bad credit, it's usually more beneficial to work on improving your credit score beforehand to secure better terms.

Working to get a healthy credit score is beneficial in a lot of ways and can help you to refinance and save money. At Auto Approve, we are here to help! Once your credit it in a good place, we can guide you through the process and handle the legwork so you don’t have to. And if you're not sure whether or not you're ready to refinance, getting a quote to see your options is free. So don’t wait to find out if you can start saving money!

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The 3 Best American Road Trips To Take This Year

Thinking about a road trip this year, but not sure which of the many amazing classic American road trips to take? You’re in the right place.While it’s hard to say that any one singular road trip is the best most beautiful roast trip to take – the United States has tons of interesting terrain, stunning vistas, and cultural landmarks from sea to shining sea – we’ve compiled three favorites that you can start planning right now.There are many more great options. Traveling Route 66 or visiting the Grand Canyon are evergreen classics. But these uniquely excellent drives were selected for weather, accessibility, and combination of natural wonders and modern conveniences. American Road Trips to Take In 2025What’s the best road trip to take for you? Only you can decide that, but it’ll depend on who you’re driving with (or if you’re flying solo!), where you’re starting your journey, and how long you want to spend in the day, per car and overall. Each of these road trips can be shortened or lengthened with fewer or more stops, and each has their pros and cons. And once you’ve picked one, check out our road trip planner.1. New England: Jamestown to Acadia National ParkIf you’re craving a seaside getaway, it doesn’t get much more iconic than a drive up the New England coastline. This is a great option for summer and fall road trips. During the summer, you get cooler temperatures than much of the US, sea breezes, lobster rolls, and beach days. During the fall, you get stunning fall colors, script temperatures, bonfires, and apple pie.This is a particularly great road trip for families and those not inclined to spend endless hours in the car, since the total driving time is fairly short and the stop options are plentiful, from bustling city life in Boston to the amazing restaurants of Portsmouth, NH, and Portland, ME, to the lighthouses, ocean views, and sprawling forests of coastal Maine and Acadia National Park. Driving time (one way without stops, approx.): 6 hoursStop ideas: RI: Jamestown, Providence; MA: Cape Cod, Boston, Salem; NH: Portsmouth; ME: Ogunquit, Portland, Freeport, Augusta, Bar Harbor, Acadia National Park You won’t want to make all these stops in a row, but if you’re driving round trip, you can always see the LL Bean boot in Freeport one way and make time for Salem’s witches (or lack thereof) on the way back.One word to the wise: This road trip won’t work in the winter due to the weather in the Northeast. Driving in winter conditions doesn’t make for a relaxing vacation!2. Smoky Mountains: Asheville to MemphisIf you’re interested in a road trip through classic Americana, a trip from North Carolina to Tennessee might be just the ticket. By stopping in Nashville and Memphis, you can see much of the heart of American music history, and the barbecue across the region is iconic. And the culture isn’t half of it – this drive takes you through the stunning Smoky Mountains and is widely considered one of the most beautiful road trips you can take.Driving time (one way without stops, approx.): 8 hoursStop ideas: NC: Charlotte, Asheville, Great Smoky Mountains National Park (crosses multiple states); TN: Johnson City, Pigeon Forge, Knoxville, Chattanooga, NashvilleA few of these are out the way from the others – stopping Charlotte would really mean starting or ending in Charlotte, and Johnson City’s out of the way, but a fine place to stop if you choose to focus on exploring the Smoky Mountains.This trip is going to have the hottest weather of the options on this list in the summer, but nothing compared to what you might experience in Zion or Big Bend. The Smoky Mountains and Asheville stay pretty cool, but by the time you get to Memphis, depending on the time of year, it can get into the 90s Fahrenheit. The good news is, all these places stay relatively temperate through the winter, so there’s no bad time of year to visit.Be prepared: Cell service is weak or non-existent in some parts of the Smoky Mountains, so you’ll want to make sure you have a paper map and a well-stocked car emergency kit, just in case.3. Pacific Northwest Meets Big Sky Country: Seattle to YellowstoneWhen it comes to iconic American experiences, Yellowstone National Park is high on the list. But to get the full flavor of the Pacific Northwest and Big Sky Country, start or end the drive in Seattle. Taking time to stop in Washington’s wine country and see Puget Sound adds another incredible set of sights and experiences, and Seattle makes a great jumping off point to visit any one of Olympic, Mount Rainier, or North Cascades National Park. From there, you’re diving into the heartland, whether you want to head up to Glacier National Park, down to Grand Teton, or straight to Yellowstone.Driving time (one way without stops, approx.): 11.5 hoursStop ideas: WA: Seattle, Puget Sound, Washington Wineries, Spokane; MT: Glacier National Park, Butte Historic District, Bozeman, Big Sky; ID: Boise; WY: Grand Teton National Park, Yellowstone National Park:This is clearly the most time-consuming, robust road trip of the three. If you’re looking for a big trip, this is the one. Yes, it’s a commitment, but worth it for the stunning views and once in a lifetime experiences. Just remember, when you’re spending a lot of time in National Parks, you want to make sure you plan your road trip meticulously. Gas stations and places to stay the night can be few and far between, and some things may book up months in advance.Don’t have a ton of time but want to see Big Sky Country? You can also fly into Yellowstone Airport (WYS) and land just two miles from Yellowstone National Park.Which of These 3 Beautiful Road Trips In The United States Sings to You?There’s no wrong choice – you want to choose something that fits the amount of time you have, your budget, and your interests.Want to spend more on your dream road trip and less on your monthly car payment?Most people are paying more than they need to on their auto loan, thanks to dealership rate markups! AutoApprove can help you find a better rate in just a few clicks. Tell us a bit about your vehicle – no commitment required – to find out how much you could potentially save through refinancing. An AutoApprove representative will help you find the deal that’s right for you, and once you’ve selected your refinance, we do the paperwork for you, easy as that!That means more money in your pocket for the things that matter most – whether that’s a soul-searching solo trip or an unforgettable family vacation.Get your free quote now.

Useful Skills You Can Learn While Driving

Have you ever considered learning while you drive? Whether you want to make better use of a daily commute or are heading out on a long solo drive, if you want to learn a skill from behind the wheel, we have some ideas for you!The key to learning on the road is to choose something you can do with just audio media – and to make sure nothing you do is so engrossing that you lose focus. It’s important that you still drive safely, no matter what. Essentially, we recommend skills you can learn from an audiobook or podcast and repetitive activities that allow you to build up your knowledge or talents over time.Let’s take a look.Things You Can Learn While DrivingThe average American driver spends, according to a AAA survey, just over an hour in their car every single day. Why not find ways to be productive with all that time? Here are some things you can pick up while you drive.1. Learn a LanguageThis is probably the most popular skill to tackle in the car. Whether you’re brushing up on a language you learned in high school, preparing for a trip, trying to improve your chances at a new job, or learning just to stay sharp, there are tons of good reasons to learn a language while you drive. And, yes, while you’ll also need to supplement with written lessons, you can work on your listening and speaking skills in the car.Depending on which language you want to learn and your level, you’ll need different resources, but here are a few ideas for ways to get started:Starting from 0: Listen to podcasts that teach you the basics (for example, Pimsleur and LanguagePod101 both have podcast-based language lessons)For skill building: Listen to programs designed for language learners (for example, News in Slow is designed for people currently learning at a beginner to intermediate level to practice listening comprehension) For advanced learners: Grow your vocabulary and get closer to fluency by listening to music or news in your target language and trying to capture any unfamiliar words, phrases, or ideas2. Listen to the Sounds of NatureIf you’re interested in the natural world, you could use the time to learn things like the calls of birds local to your area. Avid birders in particular might find this interesting – and there are many resources for birders, since it’s such a popular hobby (BirdNote Daily is a good option) – but resources exist for frog fans and other animal lovers as well, dependent on your region. And there’s no reason you need to stick to your own backyard! Noisy by Nature is a kid-focused podcast that introduces the sounds of Australian wildlife (and is, frankly, fascinating for all ages).As an added bonus, nature sounds can also be relaxing, which is helpful when you’re stuck in traffic in a 20 minute slowdown.3. Write Better EmailsWhether you’re an English learner, a complete word nerd, or someone who struggled with writing in school and wants to up their email game, there are tons of great podcasts about English grammar, word usage, and how people speak. A few top recommendations include: Grammar GirlThe AllusionistVocal FriesYou’re Saying It WrongWebster's Word of the DayExpanding your vocabulary, mastering complex grammar rules, getting into the nitty-gritty of style, and discovering common malapropisms and mistakes can make you a better writer, reader, and conversationalist.4. Level Up Your Financial LiteracyThere are tons of great personal finance podcasts being made right now. If you’ve never spent much time thinking about budgeting, saving, or your own attitudes toward money, learning about the basics of finance while you drive could be a huge help!Planet Money, which covers current events in the world of money and investment, is a fascinating and informative podcast, while So Money, Money For the Rest of Us, and Afford Anything are a few of the many long-running hits in the finance space. Read reviews and find a podcast that fits your taste – and just remember, no podcast gives specific advice, so ask a professional before making big money moves!Trying to be smarter with money?You don’t need to learn any new skills to refinance your vehicle and start saving money. Most people are paying more than they need to be on their auto loan. A refinance can help you secure a lower rate and pay less. Plus, it’s easy! AutoApprove can help you find the right deal for your unique situation – and do the paperwork for you.Get a free, no-commitment quote to see how much you could save.5. Practice Using Your VoiceWhether you’re a nervous public speaker or thinking about getting into amateur opera, the car is the perfect place to get vocal reps in. There are tons of voice teachers making content online – you could find a vocal warm-up to try while you drive, or look up exercises in advance and put them into practice when the car door is closed.Whether you rehearse a presentation or sales pitch, practice improvising speeches, or sing do-re-mi, the car is a rare place where you can let yourself be as noisy as you want, take advantage of it!6. Build Your Understanding of MathRegardless of your current level of math expertise, you can skill build while in the car. Some people work on basic skills like solving simple number problems, memorizing multiplication tables, or learning more of the digits of pi. Or, if you prefer to simply listen, there are many engaging math listens that can make you fall in love with math. A few top podcast options include: The Joy of XBreaking MathMy Favorite TheoremOpinionated History of MathematicsLeveling up your understanding of math can help you see the world in a new light! And hey, maybe you can impress your friends with your new intel.7. Learn About the WorldLast but certainly not least, there are so many great educational podcasts about all manner of things, from history to economics to niche scientific fields. Taking the time to simply learn broadly about different topics that interest you wherever you can is a very productive way to spend your time in the car. Some of the best options happen to overlap with our recommended podcasts for long drives, like Ologies, 99% Invisible, The Happiness Lab, and Revolutions. But the thing that interests you most when you set out on the road is always the best option, whatever that may be – even if it’s something silly like the workings of ‘90s cars or learning to understand Morse code. Whatever you choose, expanding your worldview and learning something new is always a good choice!And Those Are Seven Useful Ways To Spend Your Driving TimeMost of us spend quite a bit of time behind the wheel, trying to make something of that time is an admirable pursuit! From language learning to amateur opera performance, there’s always something interesting to do to pass the time and challenge your mind.But refinancing your vehicle doesn’t take any time at all.You could be paying less monthly on your auto loan, putting more cash back in your pocket for the things that matter most. Find out how much you could save with just a few clicks and no commitment. Get your free quote now.

5 Things Every Car Owner Should Know

Let’s talk about five of the essential things every car owner should know.There are tons of skills you come by naturally as you start driving. Some things you learn for your drivers license exam, some skills you pick up as you start driving. But there are a few things not everyone knows how to do that can make you a better car owner and help you feel more confident on the road.These are some of the top skills you need to take time to learn once you own a car. Let’s take a closer look.Essential Skills for Drivers and Car OwnersTake a peek at the list. Do you know how to do all of these things? Most people will have learned at least some of these skills naturally, but taking time to really master them can help you drive safer and keep your car in great condition longer.1. How to Check and Change a TireIt’s important to get to know your tires, and recognize the right tire for your vehicle. But buying the right tires is only the beginning – tire maintenance and tire changing are super handy skills for every driver. The same is true for recognizing, checking, and changing or replacing fluids like engine coolant, brake fluid, windshield washing fluid, transmission fluid, and engine oil. If you see a liquid coming out of your vehicle, being able to recognize what fluid it most likely is and whether or not it constitutes a safety hazard is key.To get you started here are the essentials of changing a tire:Find somewhere safe to park on a level, firm surface.Turn on your hazard lights.Gather your tools: spare tire, car jack, lug wrench, and your owner’s manualReview any important information in the manual about tire changes for your specific vehicle Loosen but do not remove the lug nuts (which may be under the hub cap)Position the car jack at your vehicle’s jack points based on the instruction in the car owner’s manual (sometimes marked with a notch on the chassis)Slowly raise the car with the jackFinish loosening and remove the lug nuts, keeping them somewhere you can easily find them again where they can’t roll awayRemove the flat tire and replace it with the spare, lining the spare up with the wheel studsReplace the lug nuts and gently start screwing them in by handLower the car Use your lug wrench to tighten the lug nutsPut all your equipment back where you usually keep itCheck tire pressure for all tires (you may want to go to a garage to make sure everything’s good to go and your tire pressure is even)Return to the road, driving slowly and carefully if you’re driving on a donutPracticing changing your tire a few times at home can make it much less stressful if and when you need to change one on the road.2. How to Deep Clean Your Car YourselfWhile automatic car washes are handy and typically fairly affordable, deep cleaning and detailing your car can get expensive and time consuming. Knowing how to keep your car clean and how to handle stains and wear and tear on the inside and outside can improve your driving experience. After all, according to AAA, American drivers spent an average of 60.2 minutes behind the wheel every day as of 2022. Making that space clean and comfortable can help that hour of driving feel less stressful.Plus, deep cleaning your car yourself can save you money, and some people find it meditative!Speaking of saving money…Here’s one more thing every car owner should know how to do: lower their car payment quickly and hassle-free with Auto Approve!Get a free quote to see how much you could save.3. How to Read A Paper MapOnce a ubiquitous skill, knowing how to read a paper map is less and less common with the rise of GPS and digital map apps for the phone and in-car systems. However, it’s important that drivers of all ages master this skill and keep it sharp to be safe. You never know when you could lose service or battery power. Having a map in your glovebox and knowing how to read can help save headaches should you land in a tough spot. The last thing you want in the case of a breakdown is to add not knowing where you are to an already stressful situation.And reading a map isn’t all – all drivers should have on hand and know how to read their vehicle’s manual. You never want to be stranded somewhere trying to guess the meaning of an alert you’ve never seen before!While reading a map might not be absolutely essential when you’re staying close to home, it can come in handy if you want to plan a road trip – and even more so when you hit the road and venture into new areas further from home (and, depending on where you’re heading, further from robust network coverage!).4. How to Drive in Bad WeatherGiven shifting norms for how often we see major storms – and new types of storms hitting areas that once rarely saw, for example, snow storms or hurricanes – knowing how to drive, and when not to drive, in all kinds of weather is an absolute must.Driving in winter storms or heavy rain can mean different risks and challenges than, say, very strong winds or a heatwave. Prepare for all possibilities by brushing up on your driving skills and keeping an emergency kit in your truck.In general, when the weather is crazy and you’re on the road, slow down, leave extra space between you and the car in front of you, and remember that if you start to slide, the best thing to do is take your foot off the gas and gently steer the front of your car toward the direction you want it to go.5. How To Recognize Warning Signs from An Old CarLast but certainly not least, assuming you do everything right and your vehicle serves you well for over a decade, you’ll want to start keeping an eye out for signs of wear and tear that might mean a car is on its last legs. There’s a rule of thumb called the 30/60/90 rule in auto maintenance that suggests you should take your car in for servicing and preventative maintenance every 30,000 miles. This is true regardless of how long the vehicle’s been on the road and whether or not it’s showing any of the major old car warning signs. Preventative maintenance can help catch problems early and let you drive with confidence even after years with your vehicle. If everything’s looking good, you just need to keep an eye out for rusting, brake issues, bumping or bouncing, or a persistent check engine light. And One More Thing Every Car Owner Needs to Know…How to lower their car payment! Auto Approve can help you lower your vehicle payment in minutes.Most people are overpaying on their auto loanIf you got your vehicle from a dealership, there’s a good chance you’re overpaying on your auto loan, thanks to dealer markups on rates. Auto Approve can help you find out whether you’re eligible for a better rate and start paying less through refinancing. To get started, all you have to do is answer a few questions, no commitment required. Then, an Auto Approve associate can help you find the best deal for you. Once you choose your refinance, Auto Approve does the paperwork, making the process quick and easy!Get your free quote to see how much you could save today.

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