The answer to 'air filter smells bad' is that a smelly air filter is usually a sign of mold, mildew, or bacteria buildup. This can happen when the filter gets clogged with dust, pet dander, and other airborne particles, creating a damp environment for microorganisms to thrive. A foul odor from the air filter is an indicator that it needs to be replaced or thoroughly cleaned.
If the air filter smells bad, it's best to replace it with a new one. Continuing to use a smelly filter can circulate those unpleasant odors throughout your home. Be sure to choose a replacement filter that is the correct size for your HVAC system. Cleaning the filter is an option, but the smell may return quickly if the underlying issue isn't addressed.