In your determined search for debt solutions you will most likely start out seeking out an industry professional debt expert. If this is your Google search starting point you are certainly progressing in the right direction. There are a lot of factors though to consider when seeking out counseling services to improve credit and get debt relief. Take these points into consideration when shopping for debt solutions.
What type of debt elimination am I looking for?
While the industry has its standard verbiage it is important to know that there are many different types of…debt solutions…debt management plans…debt consolidation program, etc. Which one is right for you really depends on your current financial situation and your long term credit goals over the next 5-10 years.
Debt Consolidation pays back the full balance due at reduced interest rates and one lower monthly payment. The program is designed to get you out of debt while rebuilding your credit with timely monthly payments and faster balances reductions from reduced interest rates.
A consolidation plan is built for people who are up to date on payments or slightly behind, 1-4 months, and do not see their balances going down with their regular monthly payments. The plan is also beneficial to anyone who has an active APR of 15% or higher.
Debt Settlement pays back part of the debt. The program is designed to pay back less than what you owe through settlement negotiations with your creditors by a third party. Payments are held and placed in a trust account each month you send your one monthly payment for payoff negotiations later down the road. Because the accounts must first charge off before they can begin being settled, this type of program can negatively impact your credit for seven years.
A settlement plan is designed for people who are behind on payments more than 6 months and cannot catch up on payments. Settlements are also good for consumers with bad credit, accounts in collections, or are trying to avoid filing bankruptcy. Those who do not plan on utilizing their credit for the next seven years may also want to settle on the debts as the negative on their credit is a moot point.
How can I tell if the company is reputable or just another chop shop scam?
Checking a company out is one of the most important factors in deciding to work with a professional for debt relief. The market is flooded with for profit agencies that do not have your best interest at hand over their own gains. Always check out a company with the BBB and ask for client testimonials or search for reviews online. If a company says they are non-profit ask for their 501c3 credentials. Point is, if you do not do your homework you are bound to get an F.
Whichever route you decide, a truly reputable professional agency will have employed certified credit counselors to provide you a free budget analysis and free consolidation quote before providing any payment information or committing to any services.
Finding a nonprofit is easy these days but the fees for managing the account can be drastically different, a true nonprofit earns most of their funding form grants and creditor contributions for payment. While there will always be monthly service fees they should be nominal and factored into your potential savings when receiving your consolidation quote. Some agencies go above and beyond and will even review your credit report with you free of charge. Be leery of agencies that offer to pull your credit report as this could come across as a hard inquiry and negatively affect your credit. You can retrieve your own credit report once a year for free from annual credit report .com
Speak to a certified credit counselor to explore the debt elimination option that would best suit you and your long terms goals and monthly budget. Contact a BBB Rated A+ nonprofit certified credit counselor for a free financial analysis and consolidation quote at 800.905.1563 or visit our website freedomdm.org and complete our contact request form to be reached at a time convenient for you and your schedule. Learn how to improve credit with our nonprofit credit counseling services. You can be debt free, Freedom Debt can help.