The following is a guest post by Teresa Dahl, a Yahoo! Contributor and blogger at Mommy Stuff.

If you have bad credit, you’re probably intensely aware of how much of a hindrance it is to reaching your goals and accomplishing the things you want to achieve in life. You can’t get a good credit card, you can’t get a house, you can’t afford that new car you want—in fact, your credit is so bad you can’t even rent a car. So if no one will extend you a line of credit how are you supposed to repair bad credit?

First, when researching options for credit help, know that the only way to repair your credit rating is with diligence, commitment, and a dedicated personal effort. While there are credit repair companies out there, they can’t just wave a magic wand to fix your credit problems. In truth a credit repair company actually doesn’t do anything that you can’t do on your own. They review your credit report and dispute any discrepancies with the credit bureaus on your behalf, but you can get your credit report for free one time a year at annualreport.com and dispute it yourself without spending any money.

Even the companies that advertise these services admit that in general, disputing discrepancies will only get you about 45 points on your score, which isn’t really enough to help a bad credit problem. Beyond disputing discrepancies on your credit report, a credit repair company is only going to give you tips and advice on better budgeting techniques and using credit more sensibly to improve your score. The actual work will be something you have to do for yourself.

Instead of spending money on services that aren’t guaranteed to work and require a large effort on your part, why not just put in the effort yourself and do the work to fix your credit. If you’re working to repair bad credit, there are a few things you can do to help. The steps you take to improve your credit score on your own will largely depend on the amounts and types of debts you have now.

If you don’t have any credit card debts consider applying for a secured credit card, which offers collateral in case you don’t pay so you’re more likely to get approved with bad credit. Often, these cards don’t even involve any physical collateral like your car or house; instead they require you to put down a deposit or put money into an account in case you default. A secured credit card will allow you to make purchases on credit and pay them off to build a positive credit history. Just make sure to not purchase more than you can afford in the monthly bills and pay everything on time so you don’t make your credit rating worse.

If you have credit card debts now, getting them current and then getting them paid off entirely will do wonders for your credit rating. Your FICO score is determined by a number of factors, but more than 2/3 of the credit score is based on the total amount of debt you owe and your payment history. By paying down your debt total and building a positive payment history you can improve your credit rating.

If you’re struggling to make your monthly payments, causing your credit rating to drop, you may want to consider finding debt relief with a debt management program. A credit counseling agency can assess your debts, review your options, and enroll you in a debt management program if that’s the right option for you. There’s no credit rating penalty for enrolling in a debt management program, and if you make your payments on time and complete the program successfully.

Readers: What is your credit situation like? Have you ever consulted a credit repair company? Or did you find an alternative way to turn your credit score around? Please feel free to share!

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