Blog : View
How Bad Credit Auto Loans Can Help Credit Repair  Sep 26th, 2012 
The first thing that you should consider doing, if you haven't already started it, is to create a budget for yourself. Consumer credit repair (bad credit auto loans are also a form of credit repair), in its simplest form, is all about setting up a budget and sticking to it. This involves looking at your income and controlling how much you spend. Once you have calculated how much of your paycheck needs to go towards basic expenses (food, utilities, rent/house payment) the balance can be set aside for the next step in the process.

The second step is to prioritize the balance of your debt. You should first determine the line of credit with the highest interest rate. If you have any additional funds, try and make more than the minimum payment on at least this one account. Pay the minimum due on all the others until this account is paid off. Once the account with the highest interest rate is paid off, look for the account with the next-highest rate. Repeat the procedure until all lines are paid off, including the loan you received through bad credit auto financing.

Finally, keep some money in reserve, but concentrate on paying off your debts. It always makes sense to have an emergency cash fund, but don't put any more money in it than necessary. Savings accounts pay notoriously low interest rates. Keeping your cash in one that pays 5% while your credit card interest is costing you 17% is a losing proposition all the way around. It's better to use any extra cash you have to pay off high-interest debts, such as a bad credit auto loan

Always keep this in mind: reestablishing your credit requires a two-pronged attack. Decreasing your debt while establishing a positive payment history with an auto loan using bad credit auto financing can help raise your credit score and put you back on the road to better credit.