There are a handful of legitimate ways to eliminate your debts. Various debt reduction programs available at the market place include debt management program, debt consolidation, debt settlement etc. All these programs aim at reducing your debt levels. Each of these programs has certain advantages as well as disadvantages. You need to select the program which meets your purposes best. However, one that deserves special mention is the debt consolidation program. This is more so because adherence to this program does not hurt your credit score negatively. Instead, if you can follow this program properly, your credit score is actually increased. By following this program, you can also augment your chance of obtaining new credit with better terms and conditions. However, in the first step of this program, you need to select a genuine debt consolidation company. The debt consolidators then review your financial situation and offer you free counseling session. Before selecting a debt consolidation company, you need to watch out for certain things, which are listed below.
Look out for a non-profit consolidation company
There are numerous for-profit as well as not-for-profit debt consolidation companies at the market place. Theoretically, not-for-profit debt consolidation companies are not permitted charge you more than the charge required to pay for their services. That is why, it would be wise to look out for a not-for-profit consolidation company, instead of a for-profit one. However, do not expect to get the services from a not-for-profit consolidation company at free of cost. Moreover, merely the non-profit status does not ensure that the company is a genuine one. You need to check its genuineness too.
Check its status with BBB
Better Business Bureau (BBB) is a highly acclaimed independent credit bureau in the country. Before selecting your consolidation company, check the status of your company with BBB. All the negative things about a consolidation company will be reflected in the BBB status report. If the company that you have chosen has a clean record with BBB, you can be very much assured about its genuineness. If you find that the consolidation company that you have chosen has patchy record with BBB, it would be wise to avoid relationship with that company.
Find out if there are complaints against the company
Before selecting your debt consolidation company, you need to check if there are complaints against the company. You can check this with the Federal Trade Commission or the respective State Attorney General of the state where the company is registered with. Just avoid those companies which have serious complaints against them.
Check whether or not the company follows the FTC rule
As per the new FTC rule, no consolidation company can charge upfront fees from the borrowers. They can charge fees only after the services are delivered. Moreover, consolidation companies are obliged to offer free counseling session to the borrowers. If any consolidation does not abide by these rules, it would be better to avoid such companies.
Before selecting your debt consolidation company, watch out for the above mentioned things.