Credit repair companies approach people offering to repair one's bad credit standing for a fee. Many people are not aware that one can actually repair his own credit. Thus, unsuspecting clients fall for this and end up spending more than what is necessary.
Do It Yourself Credit Repair is actually quite easy to do. One may have to spend time and a bit of money in securing all the necessary documents, but these are all necessary.
First, one must contact the three major credit bureaus and request a copy of their credit report. Sometimes, the credit report is given for free, but to be on the safe side, expect to pay a small amount for this document.
Go through the report carefully and note which of the listed accounts are closed and which ones are still active. Look for "charge offs", or accounts where the creditor has written off the debt as a loss. Contact these companies and request that this be reinstated and that payment will be made. Unfortunately, in order to improve one's credit rating, these items must be cleared off.
The next items to look for are records of late payments. Contact these creditors and tell them why late payments were made in the past and that steps are already being taken to ensure that succeeding payments will be done promptly on or before the due date.
The final step is closing off outstanding credit card accounts. If it is difficult to pay off the amount in full, then make sure that payments, larger than the minimum due, are done on time. Try to keep balances within 25% of the existing credit limit and refrain from opening new credit card accounts.
When one's credit rating has been repaired, extra care and more effort must be made to ensure that the rating won't slip again.