Five Simple Steps You Should Make When Choosing a Debt Consolidation Service

Michael Chasan's Five Simple Steps

You are no doubt reading this blog because somehow you find yourself in a quandary over how you accumulated so much debt so fast. Fear not fellow American, for you are not alone! Many people are performing the exact same Internet search that you are. Some people find themselves in debt over poor spending choices while others struggle with debt because they had an unexpected medical bill or car repair. Whatever the reason, using the credit card fulfilled the need at the time; but with a tight budget, it is common for people to struggle in repaying the debt. Since you have taken the first step in admitting that you need to get some help, follow these five simple tips.

Use the Better Business Bureau to Review Debt Consolidation Services

The Better Business Bureau is one of the best resources available when researching companies that you may choose to do business with. At a glance, quick research about a company can yield some important clues as to how you will be treated as a customer. When looking for a debt consolidation service, you will find the rating of a particular company given by the BBB as well as see how many complaints have been filed and how they were resolved.

Weigh Profit vs. Non-profit

How the company operates financially is one of the most important aspects to become familiar with when it comes to a debt consolidation company handling your personal finances. As you research the services that these companies offer, you will notice that a majority of them are non-profit organizations . This is a clear indication that the credit counselors and the company in general have the best interests of its consumers at heart. So, you can rest assured that no one in the company is going to steer you to utilize a product that may not be the best thing for your situation. 

Understand What Type of Debt Is Being Offered

There are essentially two types of debt in the world: Secured debt and unsecured debt . Be sure to ask the credit counselor which type of debt they work with. Secured debt is generally debt that involves some sort of tangible item such as a house or car. Unsecured debt is usually from credit cards or medical bills. If the company only works with secured debt and you have credit card debt, this company may not be your best option. 

Debt Consolidation Service Charges

Even though a company may operate as a non-profit, they still have bills to pay to keep their operation running. Most non-profits will have some sort of small fee. As a rule, be wary of companies that wish to charge you more than a $50 set up fee and more than a $20 monthly service fee.

Investigate Commissions

Once you determine that the company you will be working with is a not-for-profit company, be sure to inquire as to whether or not the credit counselor receives any sort of commission for each service sold. Although this type of activity is not illegal and rare, it can happen in the form of a straight commission to the counselor or under the guise of some sort of fee.