There's a myth that refinancing is only for people with great credit. It's backwards. The drivers with the most to gain from refinancing are often the ones who financed with a low score and a sky-high rate in the first place. If you're paying 18%, 20%, or more, even a modest improvement can free up real money every month.
Bad credit makes refinancing harder, not impossible. Here are six moves that actually work, and how to find the lenders willing to say yes without damaging your score in the process.
1. Wait for the on-time payments to work for you
The most underrated credit-repair tool is the loan you already have. Every on-time car payment you make builds positive history. Six to twelve months of steady payments can be enough to lift you into a better rate tier, even if you do nothing else.
If you financed at a rough moment and your payments have been solid since, you may already qualify for better than you think. That's worth checking, not assuming.
2. Add a creditworthy co-applicant
This is the single most powerful move for a low score. Adding a co-applicant with strong credit, a spouse, a parent, a sibling, lets the lender price the loan partly on their profile. It can be the difference between a decline and an approval, or between a high rate and a genuinely good one.
The co-applicant shares responsibility for the loan, so it's a real commitment on both sides, but for many drivers it's the key that unlocks the door.
Why it works
Lenders price risk. A strong co-applicant lowers the perceived risk on the whole loan, which is what pulls the rate down, sometimes by several points.
3. Target lenders that specialize in your situation
Not all lenders draw the same credit line. Some in our network work with scores from 500 up, and some specialize in rebuilding credit or in older, higher-mileage vehicles that other lenders reject. Applying to the wrong lender gets you a decline; matching to the right one gets you an offer.
This is the core reason a marketplace beats a single bank when your credit is thin. You find the lenders who say yes to your profile instead of collecting rejections.
Check your matches without leaving this page · soft credit pull · no score impact
4. Fix the quick wins on your credit report first
Before you refinance, pull your free credit reports and look for fast fixes: an error to dispute, a small balance to pay down, a card sitting near its limit. Lowering your credit utilization is one of the fastest ways to nudge your score up, and it can happen in a single billing cycle.
You don't need a dramatic turnaround. You need to cross the next tier, because rates step down in bands, not smoothly.
5. Look for credit-building loan features
Some lenders report your refinance and on-time payments to all the major credit bureaus, which means the new loan itself keeps building your score. A few network programs are designed specifically to help borrowers climb. If rebuilding is your goal, those features are worth prioritizing, not just the rate.
6. Compare with a soft pull, so shopping doesn't cost you
When your credit is already low, the last thing you want is to ding it further by applying to lender after lender. A marketplace match runs on a soft credit check, so you can see offers from multiple lenders with zero impact to your score. Only the one offer you choose leads to a hard inquiry.
That means there's no downside to looking. You either find a better rate, or you confirm you're already in a good spot. Either way, your score is safe.
The bottom line for lower scores
If you financed with bad credit, you are probably overpaying more than anyone, and you have the most to gain. The strategy is simple: let your on-time payments and any quick credit wins do their work, then match to the lenders that actually lend in your range, using a soft pull so shopping is free. Two minutes tells you where you stand.
Frequently asked questions
What credit score do I need to refinance a car?
Lenders in the RefiMeNow network work with scores from about 500 up. A lower score matches with fewer lenders and higher rates, but options exist, especially with a co-applicant or after a stretch of on-time payments.
Can I refinance a car with bad credit and actually save?
Often, yes, because borrowers who financed with low credit tend to have the highest starting rates. Even a modest rate drop can lower your payment. The only way to know your number is to compare, which uses a soft credit check.
Will refinancing help me rebuild my credit?
It can. Some network lenders report your on-time payments to the major bureaus, so a new loan you pay steadily helps your score climb over time. Lowering your rate also makes those payments easier to keep on time.