How to Choose a Debt Relief Company
If you're drowning in bills, you might be ready for someone to throw you a life
preserver right about now. Before you grab onto it, however, make sure you know
who's on the other end of that lifeline.
You've probably seen ads for "credit card debt relief," "homeowner debt relief"
or "credit debt relief" online, on TV and in the newspaper; so you know that debt
relief really exists. But not all the companies you see advertised are necessarily
above-board. That's why it's so important to know what you're looking for when
you hire a debt relief company. Reputable credit debt relief companies offer credit
counseling and debt management services
that allow you to find the right solution to your particular financial problems.
These services are highly customized and based solely on your debts and your ability
to repay them. So if you run across a company that wants to charge you for generic
information that doesn't apply to your situation, go elsewhere.
Tips for Choosing a Credit Debt Relief Company
Look for the following signs of integrity and effectiveness when comparing debt relief
companies:
They don't try to sell you a magic debt relief bullet that comes with no consequences
If a company tells you there's a way to get your debts under control quickly, they could
potentially be referring to debt management, which involves renegotiating your debts with
your creditors. If they renegotiate successfully, you would pay a specific monthly amount
to the debt relief company to cover the new lower payments and any fees. This can be a great
option if you're in financial trouble but it also has a few drawbacks: debt management
requires that you close all your credit accounts and not open any new ones during the time
you're working with the credit debt relief company. If a company doesn't present both the
pros and the cons of debt management or any of their other services, don't work with them.
They don't claim they can erase bad credit
Credit information stays on your credit record for up to seven years unless you dispute it
and prove there's been an error. If a credit debt relief company claims to be able to wipe
legitimate bad credit entries off your credit records, stay away from them.
They have a track record
A number of companies have cropped up in recent years that are trying to get their fair share
of the booming homeowner debt relief and credit card debt relief markets. There's not
necessarily anything wrong with retaining a new company; you just need to be all the more
careful about checking that they've had success helping people. Chances are good that a company
that has been around a long time and has many client testimonials will be reliable. It's also
a big plus if they're in good standing with the Better Business Bureau
and credit industry trade organizations.
They offer free information
Some debt relief companies offer free educational materials and even a free analysis of your
financial situation. These will not only help you understand more about your finances and how
to get out of debt but they also indicate the credit debt relief company's willingness to
provide genuine value