If you want to improve your credit, you need to be armed with solid facts. There are many companies that prey on people with poor credit. If you educate yourself before you start, you can avoid these scams and rebuild your credit the right way.

 There are two important things to look for when applying for new credit when you have poor credit. Make sure there are no upfront fees involved. This is different than requiring a deposit, as many legitimate secured credit cards do. If you are going to receive a credit card with a $300 limit, but it is only going to arrive with $25 in available credit, you've paid an upfront fee of $275  for the privilege of using their credit card.

Also check the interest rate. If you are paying more than 20 percent interest, it's not worth it. You may have to put up with higher interest rates when you have bad credit, but anything higher than 20 is too high.

 More than likely, you aren't going to qualify for any good unsecured credit accounts. If your credit is really poor, you may even have a hard time qualifying for some secured cards.

Secured cards work somewhat like a bank account with a debit card. You have to deposit money into the account before you are given a credit limit. Most of the time, if you deposit $500, your credit card will have a $500 credit limit.

There is one major difference between secured credit cards and debit cards. If you make your minimum payments in a timely fashion for a specified time, you will often qualify to have your secured card converted to a standard credit card. When this happens, your deposit will be refunded.

 Credit repair companies will often claim they can clean up your credit quickly for a fee, but sometimes they can do more harm than good. They will usually write letters on your behalf to credit card bureaus challenging the entries on your report. They hope that the original creditor will not respond to the challenge within the required timecframe, and the credit reporting agency will be required by law to remove the entry.

If they are successful in getting entries removed, your credit will improve. If they are not successful, they can get your credit report flagged by the credit reporting agencies as someone who is attempting to repair his or her credit. If your report is flagged, it will be much harder for you to get legitimately incorrect entries removed in the future.

These agencies generally do nothing that you cannot do yourself. You can write letters to the credit reporting agencies requesting corrections and verification of debts if there are entries you believe to be false. But requesting legitimate entries to be removed can do a lot of harm. It's better to pay your bills, even if it takes several years to do so.  Remember, every payment you make shows up on your report and improves your credit.

 Pay your bills on time whenever you can, but sometimes you may have more bills than you can handle. When this happens, contact your creditors and try to work out arrangements to make smaller payments for a while.

Many creditors won't be willing to work with you, but if you explain to them that you cannot make your minimum payments, some will be willing to. After all, it's better for them to get a small amount from you than nothing at all. They may not be willing to report these smaller payments to the credit bureaus as on-time payments, but they might not submit them as late payments. This will at least prevent your credit from getting worse.

Every payment you make on time will improve your credit slightly, so make as many payments as you can. If you have to, pay smaller payments first so you can get more of them paid. Each payment adds to your credit score, so the more you make, the faster your credit score will rise.