Repairing your bad credit: What you need to know

HOUSTON (KTRK) -- You have seen and heard the ads by companies promising to erase bad credit. Do yourself a favor and don't believe the hype because it could end up costing you big bucks in the long run.

Matt Schulz with www.CreditCards.com says credit repair companies make a lot of big promises, but the reality is those places generally can't do anything that you can do with a couple of phone calls.

So do it yourself he says. First, get a copy of your credit report. You can get a free one if a company denies your application.

Then once you get the report take a look and make sure everything is accurate. Even though it's not your fault, a mistake on a credit report means your score takes a hit.

Next, you have to tell the credit reporting company in writing what information you think is inaccurate. Then ask for that information to be removed or corrected.

Credit reporting companies must investigate legitimate claims within 30 days.

Late payments that you didn't make are easy to prove, fix and give you a big boost on your credit score. Matt Schulz says getting a late payment removed from your report can really skyrocket your credit score in a pretty short amount of time.

The final step, let the creditor or other information provider know you are disputing a claim.

Because credit card fraud is on the rise, it's worth checking your report once a year to make sure it's all accurate information that is being reported.

For more on repairing your own credit, check the Federal Trade Commission's web site.