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How Can I Refinance My Car With Bad Credit? – Erik

“Dear Steve,

My situation revolves around my car loan. I got my loan back in July 2006, and the interest rate was high, understandably because I had bad credit. Now two and a half years later, it seems that it still is horrible, because NO ONE will refinance me. I tried (I googled my problem, saw you recommended it to a contractor and I looked into it – minimum FICO too high for me), and nothing. LendingTree, nothing. I’ve scoured local credit unions, banks, my own bank, even relatives.

I’ve been making payments on time since my loan started and the lenders tell me I’m one of the their best accounts. I even spoke with my old rep and he told me since my account is so good, I could refinance with someone else because of my history. I’d qualify for “good rates”. NO LUCK. Last time I checked my FICO was close to 600 (590 i think), and while it’s not good, it’s not horrendous – ok, maybe it is.

Every website or offer or blog that tells me “we’ll help you get re/financed even with BAAAAAD credit”, I’m weary. I feel like I have a Scarlet Letter on my credit report. I’ve tried fixing errors but to no avail, so I feel the next option is to restructure some of my debt (which is only my $8k auto loan and $6k student loan, and one credit card) with fresh numbers and lower payments.

This situation has me so stressed out its ridiculous, I have until mid-November to figure it out. I requested a deferment from my current lender due to surgery expenses (I’m skipping October’s payment).

From what I’ve read, you seem like one of the good guys. People trust you, and I know you’re coming from where I am, because you’ve been there. So I know you’ll straight-shoot me on this. If I can, great. If I’m barking up the wrong tree, that’s okay too. I just want to know if I need to stop looking. Sorry this “situation” has been so lengthy, I thought I’d lay it out there though.I hope you can help me, Steve.




Dear Erik,

Thanks for the question. I think we need to start a bit further back on this issue. Why does your credit score suck?

The minimum for is 660 and the same or higher for other legit lenders. So we need to quickly tackle the score problem.

My advice would be to get a copy of your consolidated credit report with the credit score option. This is the consolidated credit report I use for myself but feel free to go out and find another provider than can deliver a 3 in 1 credit report to you.

The reason a consolidated credit report is so important is that we need to see what each of the three major credit bureaus are saying about you. No single credit bureau has the whole picture about you. The credit score option is important since we need to see your score from all three bureaus. It is not the same with each provider. The score option will also show why it is as low as it is.

Once we know the root causes for the low score then you can address those issues and your score will rise. The higher credit score will get you back among the credit living instead of the bad credit undead.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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    Before you jump behind the wheel of your new car give yourself complete peace of mind and ask about the great GAP and car credit options.

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