How Your Credit Score Impacts Auto Refinance Rates

Dakota DeRego
Jul 24
3 min read

When it comes to refinancing your auto loan, one number can make or break your monthly savings: your credit score.

You probably know your score matters when you buy a car—but it’s just as important when you try to refinance. A higher score means a lower interest rate, and that means more money stays in your pocket each month.

Let’s break down how your credit score impacts your auto refinance options—and what you can do if your score isn’t quite where it should be.

What Lenders See in Your Credit Score

Auto lenders use your FICO score or a version of it tailored for auto lending. That number helps them assess how risky you are as a borrower. It’s based on:

Payment history (35%)
Credit utilization (30%)
Credit age (15%)
New credit inquiries (10%)
Credit mix (10%)

Generally, the higher your score, the more trustworthy you appear—meaning you’re more likely to get approved and offered a lower interest rate.

How Credit Tiers Affect Refinance Rates

Here’s a basic breakdown of credit tiers and how they typically impact refinance rates:

Credit Tier	Score Range	Estimated Refi APR
Excellent	750+	4.99% – 6.99%
Good	700–749	6.99% – 9.49%
Fair	640–699	9.99% – 14.99%
Poor	580–639	15.00% – 20.00%+
Subprime	Below 580	20.00%+ or denial

Note: Rates vary based on lender, vehicle, term, and market conditions.

As you can see, even a 50-point improvement in your score could cut your interest rate in half.

How Much Can a Better Score Save You?

Let’s say you have a $25,000 auto loan with a 60-month term:

At 10.99%, your monthly payment is $543
At 6.49%, it drops to $489

That’s $54/month or $3,240 in savings over the life of the loan—just from having a better credit score.

How to Improve Your Credit Before Refinancing

If your score’s not where you want it, don’t worry. You can start improving it with a few smart moves:

Pay down credit card balances – Lower your utilization under 30%
Make all payments on time – Payment history is key
Avoid new hard inquiries – Hold off on new loans or cards
Check your credit report – Fix errors that may be dragging you down
Become an authorized user – Add yourself to a trusted family member’s account with good standing

Even 30-60 days of focus can lead to a noticeable bump in your score.

Can You Refinance with Bad Credit?

Yes, you still can refinance with bad credit—but your options will be more limited. We specialize in helping drivers across all credit tiers, and even if your score is on the lower side, we may be able to: